Student loan forgiveness

Investigations have found that student borrowers were pushed into forbearance without knowing their options and that inaccurately tracked payments hindered ...

“We have a total count of more than 725,000 borrowers that we have helped into different forms of forgiveness and that number will continue to grow,” he said. “We urge you to extend this essential relief through at least the end of the year due to the economic fallout of the pandemic, using the intervening time to finalize and implement a comprehensive approach to student loan relief – because no borrower should have to resume payment until you make critical and urgently needed reforms to fix our student loan system. “They want to tout America’s return to normal following the pandemic but also want to keep extending emergency relief policies. But it may not matter this midterm season, with inflation and high gas prices putting the American public in a bad mood. Biden has shot down the idea several times since he took office, citing concerns about canceling debt for borrowers who graduated from elite schools like Harvard University – essentially adhering to the idea that wide-scale student loan debt cancelation often benefits wealthier borrowers. But for a united coalition of progressives in the House and Senate, it isn’t enough. The federal student aid office is also set to issue new guidance to student loan servicers to ensure accurate and uniform payment counting practices, department officials said. “We are working really, really hard where there is clear authority to help borrowers,” Kvaal said. As it stands, the Education Department’s regulations and servicer contracts have safeguards, including a 12-month limit for any single use of forbearance and a 36-month cumulative limit on discretionary forbearance. “We wanted to act as quickly as possible to address these problems but we expect these figures to only grow,” Kvaal said. And what’s worse is that they have left many students worse off than if they had never attended colleges at all and they exacerbate the racial wealth gap.” The findings were also bolstered by investigations from state attorneys general and the Consumer Financial Protection Bureau.

Over 3.6 million borrowers are expected to benefit, with at least 40000 borrowers receiving immediate student loan forgiveness.

Another 3.6 million borrowers will receive at least three years of additional credit toward IDR student loan forgiveness, according to the Department. Notably, the Department’s announcement suggests that shorter-term forbearances will not be automatically adjusted to count towards student loan forgiveness. In addition, FSA “will count months spent in deferment prior to 2013 toward IDR forgiveness (with the exception of in-school deferment).” The Department also indicated it would take steps to improve guidance and increase oversight of loan servicers moving forward to reduce future instances of forbearance steering. Millions of borrowers were improperly steered into forbearance, rather than an income based repayment plan, causing them to lose months or years of progress towards student loan forgiveness since these periods do not count towards the 20 or 25-year IDR repayment term. After 20 or 25 years (depending on the plan), the borrower is entitled to student loan forgiveness for any remaining balance. The Biden administration on Tuesday announced sweeping, historic reforms for student loan forgiveness and income based repayment programs.

In its latest attempt to fix widespread breakdowns in the federal student loan payment system, the Education Department said on Tuesday that it would use ...

The move will help people seeking to have their loans eliminated under the Public Service Loan Forgiveness program and through the use of income-driven repayment plans. The Education Department will use one-time waivers and adjustments to retroactively credit millions of borrowers with additional payments toward loan forgiveness. The credits will help borrowers seeking to have their loans eliminated under the Public Service Loan Forgiveness program and through the use of income-driven repayment plans. More than 13 percent of direct loan borrowers were in forbearance for more than 36 months between 2009 and 2020, the department said. Servicers were supposed to let borrowers stay in forbearance for no more than 12 months at a time, and no more than 36 months in total, but they routinely flouted that rule. The department said those borrowers often should have been guided toward income-driven repayment, which generally caps payments at no more than 10 percent of a borrower’s income and can reduce monthly payments to zero.