The Department of Education has discharged nearly $15 billion worth of student loan debt through executive action since President Joe Biden took office a year ago, according to a press release.
More than 675,000 borrowers have qualified for student loan forgiveness through programs like Public Service Loan Forgiveness (PSLF), borrower defense to repayment, closed school discharges and total and permanent disability charges (TPD).
However, there are many borrowers who haven't yet benefited from student loan cancellation. The Education Data Initiative estimates that approximately 43.2 million Americans still owe $1.75 trillion in student debt, amounting to nearly $40,000 per borrower.
Keep reading to learn more about Biden's student loan forgiveness plans, as well as alternative student debt repayment options like refinancing. You can learn more about student loan refinancing by getting in touch with a knowledgeable loan expert at Credible.
Who has gotten student loan forgiveness under Biden?
As a presidential candidate, Biden campaigned on forgiving up to $10,000 worth of federal student loan debt per borrower. Although the president has not enacted widespread student loan cancellation, he has delivered about $15 billion worth of debt forgiveness through the following programs:
- TPD discharges. More than 400,000 with a total and permanent disability have had a total of $7 billion of student loan debt forgiven. The Education Department used existing data from the Social Security Administration (SSA) to automatically discharge the loans of qualified borrowers — previously, these borrowers had to apply for relief on the Federal Student Aid (FSA) website.
- Public Service Loan Forgiveness program. The Biden administration recently announced changes to the PSLF program, making it easier for applicants to receive credit for past periods of repayment. More than 70,000 borrowers have received forgiveness through the limited PSLF waiver, totaling close to $5 billion worth of student loan discharges.
- Borrower defense to repayment. In June, the Education Department approved borrower defense claims for 18,000 students who attended ITT Technical Institute, totaling $500 million worth of student loan relief. This brought the total borrower defense loan cancelation under the Biden administration to $1.5 billion for approximately 92,000 borrowers.
- Closed school discharges. Another 115,000 ITT Tech students qualified for more than $1.26 billion worth of student loan forgiveness under the closed school discharge program. These borrowers didn't complete their degree or credential through the now-defunct institution and dropped out on or after March 31, 2008.
If you're not eligible for forgiveness, you may be considering alternative methods for repaying your student loan debt. One such method is refinancing, in which you take out a private student loan with better terms to pay off your existing student debt.
Student loan refinancing may help you reduce your monthly payments, pay off debt faster and save money over time with a lower interest rate. You can compare student loan refinance rates on Credible for free without impacting your credit score and determine if this debt repayment strategy is right for you.
What to do if you don't qualify for student loan forgiveness
While thousands of student loan borrowers have had their student loan debt discharged since President Biden took office, millions more still haven't benefited from student loan forgiveness. If you don't qualify for student loan relief, consider a few alternative debt repayment options:
- Enroll in an IDR plan. Income-driven repayment allows federal student loan borrowers to limit their monthly student loan payments to 10-20% of their disposable income. You can enroll in an IDR plan on the FSA website.
- Apply for additional federal forbearance. The current COVID-19 forbearance period ends May 1, 2022, but some borrowers with federal student loans may need more time before resuming payments. It may be possible to qualify for up to 36 months of additional forbearance through an economic hardship or unemployment deferment request.
- Lower your monthly payments by refinancing. A recent Credible analysis found that well-qualified borrowers who refinanced their student loan debt were able to reduce their monthly payments by $250 on average, all without adding to the total cost of interest over the life of the loan.
Keep in mind that refinancing to a private loan would make you ineligible for certain federal benefits, such as income-driven repayment plans (IDR) and select student loan forgiveness programs. If you don't plan to utilize these federal programs or have private student loans, then it may be worthwhile to refinance while interest rates are near record lows.
You can browse current student loan refinancing rates in the table below, and visit Credible to compare rates across multiple lenders. This way, you can find the lowest possible interest rate for your financial situation.
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