Millions of borrowers with Direct Loans or Federal Family Education Loans (FFEL) have the opportunity to receive loan forgiveness through a one-time adjustment that counts previous payments towards forgiveness, even if they were not in public service at the time, as long as they meet certain criteria and submit the necessary forms.
President Biden's student-debt relief plan, which aimed to wipe out up to $20,000 of borrowers' balances, has been struck down by the Supreme Court, prompting the administration to develop a new plan while payments are set to resume soon.
A survey reveals that 62% of student loan borrowers in the US are considering boycotting loan payments due to doubts about affordability, with half of respondents believing a boycott could lead to total debt forgiveness, raising concerns about the risks and consequences of refusing to repay student loans.
President Biden is taking a bold stance against the Supreme Court by announcing another plan to forgive student debt, directly challenging the court's ruling and framing it as an attempt to usurp democratic action.
Despite economists' expectations, many student loan borrowers have already resumed making payments before the October deadline, potentially leading to a decline in consumer spending and affecting the economy as households adjust their budgets.
As part of President Biden's efforts to make student loans more manageable, the administration has created a 12-month on-ramp to repayment starting in October 2023, allowing borrowers to delay payments without negative consequences, although interest will still accumulate; however, the administration's new SAVE income-driven repayment plan may be a better option for some borrowers.
House Republicans have advanced legislation to overturn President Joe Biden's new student loan repayment program, which lowers monthly payments and caps interest, while Biden officials promote it as a crucial tool to help Americans manage their federal student loan payments.
Borrowers should prepare for the resumption of student loan payments by exploring repayment options, such as deferments and income-driven plans, as well as utilizing resources like the federal loan calculator and financial aid administrators.
The Biden administration is implementing a 12-month "on ramp" to student loan repayment, protecting borrowers from consequences such as credit reporting and collections, while many student loan servicers are changing and borrowers may need to update their information. Additionally, monthly payment amounts may vary depending on the repayment plan and income-driven options.
Rep. Alexandria Ocasio-Cortez reassures student-loan borrowers that there is still a chance for debt relief under the Higher Education Act despite the Supreme Court ruling against broad student-loan forgiveness, while criticizing Republicans for ending the student-loan payment pause.
The Biden administration will cancel nearly $37 million in student debt for over 1,200 students who attended the University of Phoenix, as part of the borrower defense program for borrowers who were misled or defrauded by their schools.
The Biden administration has introduced a new federal student loan repayment plan called SAVE (Saving on a Valuable Education) that calculates monthly payments based on a borrower's income and family size, and offers forgiveness after 10 years of payments.
Hundreds of thousands of borrowers in the US are set to receive at least $6 billion in student loan forgiveness, but a major loan servicer is being accused of violating the terms of the agreement, adding to the ongoing issues faced by borrowers as student loan payments resume.
Summary: Student loan borrowers have the option to appeal for forgiveness through either the Public Service Loan Forgiveness or the Income-Driven Repayment Forgiveness federal programs.
