Loan benefits

Who qualifies for the $17 billion in student loan forgiveness Biden has approved so far?

(NEXSTAR) – During his candidacy, President Joe Biden voiced support for federal student loan forgiveness of $10,000 per borrower. Just over a year into his presidency, Biden has yet to deliver widespread student debt cancellation.

The administration, however, canceled more than $17 billion in debt for some 725,000 borrowers for multiple reasons.

Here’s who became eligible for student loan forgiveness under recent moves by the Department of Education.

40,000 due to changes to “long-standing failures”

More recently, the Biden administration announced new actions by the Department of Education to “fix the long-standing failures of student loan programs.” An estimated 40,000 borrowers have become eligible for “immediate debt cancellation” as they are now eligible for the Public Service Loan Forgiveness Scheme (PSLF) under the new amendments.

Thousands of other borrowers with older loans will also get forgiveness through income-based repayment, according to the Department for Education. An additional 3.6 million people will receive at least three years of additional income-contingent reimbursement (IDR) waiver credit.

While the Department of Education’s announcement on those changes does not include the full amount of canceled debt, a Wednesday statement from Republican House Budget Committee leader Jason Smith says it leads $3 billion in debt cancellation for 40,000 borrowers.

More relief from the PSLF

In total, more than 113,000 borrowers have received $6.8 billion in debt forgiveness “thanks to improvements to the PSLF” under the Biden administration, according to the Department of Education.

Last October, an overhaul of the PSLF program was supposed to allow 22,000 borrowers with consolidated loans to immediately qualify for a $1.74 billion rebate without further action. Meanwhile, the Department of Education said another 27,000 borrowers could qualify for a $2.82 billion discount if they were able to “certify additional periods of employment”.

By the end of 2021, the Biden administration said more than 70,000 borrowers were eligible for nearly $5 billion in federal student loan forgiveness due to changes to the PSLF program.

Borrowers in total & permanent disability

Another 400,000 borrowers with total and permanent disabilities received $7.8 billion in student loan debt forgiven.

In August, more than 323,000 borrowers got more than $5.8 billion in automatic student loan discharges under a new regulation from the Department of Education. To identify eligible borrowers, officials used existing data from the Social Security Administration.

Using this data mapping, Federal Student Aid Chief Operating Officer Richard Cordray mentioned approximately 15,000 to 20,000 newly eligible borrowers will have their loans canceled each quarter.

Borrowers defrauded by their school

About 107,000 borrowers who were defrauded by their school saw $2 billion in student loan debt forgiveness. Among those are about 1,800 former DeVry University students who received aid after the Education Department discovered that the institution “made numerous false claims about its placement rates.”

Another 25,900 borrowers receive Borrower Defense releases due to findings related to five other institutions:

  • Westwood College
  • ITT Technical Institute Nursing Program
  • Minnesota School of Business/Globe University Criminal Justice Programs
  • Corinthian colleges
  • Marinello beauty schools

According to the Secretary of the Department of Education, Miguel Cardona, these colleges “violated the law and the norms”.

For those who attended ITT Technical Institutes before it closed, $1.2 billion was forgiven.

What about the widespread cancellation of student loans?

Before Biden announced the fourth student loan freeze, 96 lawmakers — 21 senators and 75 House members — called on him to “cancel student debt now,” saying it would “bring long-term benefits to individuals. and the economy, helping families buy their first home, open a small business or invest in their retirement. More broadly, canceling student debt would add tens of billions of dollars to GDP growth.

There is, however, confusion regarding Biden’s power to cancel student loans. House Speaker Nancy Pelosi said he had no legal authority, commenting instead “It would be an act of Congress.” Senate Majority Leader Chuck Schumer, meanwhile, argued that Biden could do so under the same legal provision Trump used to delay payments and interest accrual early in the pandemic, reports The Hill.

According to The Hill, Biden requested a memo from the Department of Education on his authority to cancel student debt through an executive order a year ago, but the administration has not announced whether that memo is complete.

Earlier this month, White House press secretary Jen Psaki said Biden was canceling some of the federal student loan debt that remains on the table. He could even decide in the coming months, according to The Hill.