President Joe Biden (Photo by Alex Wong/Getty Images)
The U.S. Department of Education is cancelling another $2 billion of student loans.
Here’s what you need to know.
Student Loans
More good news for student loan borrowers seeking student loan forgiveness. U.S. Secretary of Education Miguel Cardona tweeted:
U.S. Secretary of Education shares good news on cancelling student loans.
“Good news!” Cardona tweeted. “Over the coming weeks, more borrowers — including veterans & service members — will get emails about #PSLF debt cancellation,” Cardona added, referring to Public Service Loan Forgiveness student loan debt cancellation.
“Here are the details:
- 30K+ borrowers will get an estimated $2B forgiven.
- Roughly 10K have already had $715M discharged.
- 20K will receive emails in the coming weeks.
Check your inboxes!”
(Here’s how to get student loan forgiveness).
What this means for student loan forgiveness
Cardona is referring to new student loan forgiveness that will benefit at least 30,000 student loan borrowers. This new student loan forgiveness is a result of major changes to student loan forgiveness that President Joe Biden announced last month. (You can still get student loan forgiveness even if you don’t work in public service). Among many changes, student loan borrowers who are pursuing public service student loan forgiveness will be able to count previously ineligible student loan payments, get credit for student loan payments that were late, get credit for student loan payments under the wrong student loan payment plan, and get student loan forgiveness for both FFELP and Perkins Loans. Cardona confirmed that 10,000 student loan borrowers already have received $715 million of student loan forgiveness. The good news is that the Education Department will email 20,000 more student loan borrowers to inform them that they too will get student loan forgiveness. If you are pursuing public service loan forgiveness, make sure you update your latest contact information, including your email address, with Federal Student Aid. (Here’s who qualifies for student loan forgiveness right now).
Student loans: next steps
Biden has now cancelled $11.5 billion of student loans since becoming president in January. The $2 billion of student loan cancellation is part of Biden’s ongoing plan to focus on targeted student loan cancellation. Unlike wide-scale student loan cancellation — which could cancel student loans for most or all student loan borrowers — targeted student loan cancellation focuses on student loan forgiveness for specific constituencies of student loan borrowers. Biden has focused student loan forgiveness primarily on three main groups: public servants, student loan borrowers with a total and permanent disability, and student loan borrowers who were misled by their college. Wide-scale student loan cancellation is still a possibility, as the Biden administration evaluates its options. That said, don’t expect any wide-scale student loan cancellation before student loan relief expires January 31, 2022. Instead, you should prepare for student loan payments for federal student loans to resume with your normal interest rate. Understand all your options to student loan payments.
Here are some popular options to pay off student loans:
- Student loan refinancing (lower interest rate + lower monthly payment)
- Income-driven repayment plans (lower payment, but same interest rate)
- Public service loan forgiveness (student loan forgiveness for public servants)
Student Loans: Related Reading
How to get student loan forgiveness
Here’s who qualifies for student loan forgiveness right now
What’s next for student loan forgiveness
3 ways to get a lower student loan payment
