Why Student Debt Forgiveness Got Easier and How You Can Apply

POTUS Joe Biden, recently in coordination with the Department of Education (DOE), granted $4.5 billion worth of student loan forgiveness in October of 2021 with major changes in the Public Service Loan Forgiveness Program. If rejected for student loan forgiveness, or unsure if you qualify for student loan forgiveness, or just curious if you qualify for student loan forgiveness, do pay attention as it means the difference between no student loan forgiveness and total federal student loan cancellation.

Student loan forgiveness and the changes

Creator: Paul Bradbury

Major changes help correct issues, such as which student loans can secure student loan forgiveness; which employers would qualify for student loan forgiveness and which loan payments count for student loan forgiveness. These major issues remove large impediments that could result in tens of thousands of student loan borrowers not getting student loan forgiveness. To qualify for forgiveness through public service, student borrowers must be working full-time or at least 30 hours per week, for a qualified public service or non-profit employer, enrol in a qualified repayment plan, and make 120 student loan payments, making at least a major part of those student loan payments while enrolled in an income-driven repayment plan. Student loan forgiveness is now available. Before such changes, the program had a 98% rejection rate. Many student loan borrowers failed at student loan forgiveness as promised even with 10 years of qualified public service employment.

Student loan forgiveness: Applying and appealing if rejected

Creator: Andrii Dodonov | Credit: Getty Images/iStockphoto

If your application was previously rejected, the DOE has a simple process for student loan borrowers to secure student loan forgiveness. To count previous loan re-payments, you must ask for a limited waiver within one year up to October 31, 2022. If rejected for student loan forgiveness, what should be done? These major changes to student loan forgiveness include a formal process for student loan borrowers who were rejected earlier to appeal DOE decisions and correct errors. This reduces bureaucratic roadblocks to enable more borrowers a chance for student loan cancellation.

Next steps for student loans

Biden has cancelled $11.5 billion of student loans, but student loan forgiveness may be expanded as he intends to expand eligibility criteria. These changes to student loan forgiveness came after the news that Navient would cease servicing federal student loans. Secretary of Education Miguel Cardona also intends simplifying student loan repayment to ensure that student loan borrowers get financial relief. Though Congress hasn’t passed any legislation on wide-scale student loan forgiveness, the focus remains.

Creator: Tom Brenner | Copyright: 2019 Getty Images

At a town hall meeting Cardona confirmed that wide-scale student loan forgiveness is a possibility as Biden administration discussions continue. If pursuing student loan forgiveness, ensure you understand all options for student loan repayment. With student loan relief expiring, some popular ways to save money on student loans are: student loan refinancing, income-driven repayment plans, public service loan forgiveness. Any student borrower who would meet the requirements of the the waiver program can be awarded a complete federal student loan cancellation. Student loan borrowers who repaid loan payments previously, but they weren’t counted properly (for FFELP/ Perkins Loans, used an ineligible student loan repayment plan; repaid prior to Direct Consolidation Loan, student loan borrowers on active military duty, student loan deferment)