January 20: On his first day as president, Biden extends student loan forbearance to September 30. The White House says in a press release that Americans struggling to pay for basic necessities “should not be forced to choose between paying their student loans and putting food on the table.”
This action pauses federal student loan payments and collection and maintains the interest rate at 0%
February 4: Senator Elizabeth Warren (D-Mass) and Senate Majority Leader Chuck Schumer (D-NY) reintroduce a bicameral resolution that calls on the president to use executive authority under the Higher Education Act to cancel up to $50,000 for Federal student loan borrowers. White House press secretary Jen Psaki reaffirms Biden’s support to cancel “$10,000 of federal student loan debt per person” and calls on Congress to draft and pass a proposal that he could sign into law.
erican Rescue Plan, which aims to offset the impacts of the COVID-19 pandemic with $1.9 trillion in stimulus relief. The package includes more than $128 billion in grants to state educational agencies and $39 billion for higher learning institutions, and makes student loan debt forgiveness tax-free until .
lines the borrower defense relief process, which cancels roughly $1 billion in student loan debt for 72,000 people. Those with approved fraud claims against colleges, universities and career schools will get federal student loan discharges and reimbursements.
March 29: More than 41,000 borrowers with total and permanent disabilities get $1.3 billion in student loans canceled. The Department of Education also waives income-monitoring requirements imposed by the Trump administration for another 190,000 borrowers with disabilities.
April 28: Biden presents legislation for a $1.8 trillion American Families Plan, which includes funding for universal prekindergarten, free community college, and other education initiatives that aim installment loans New Jersey to make college education affordable for low- and middle-income students.
While no legislation for student debt relief has been passed by Congress, Democrats and the Biden administration have taken some steps towards helping Americans manage or get out of student loan debt during the COVID pandemic
June 16: The Department of Education approves another $500 million in student loan relief for 18,000 borrowers who attended ITT Technical Institute. This adds up to $1.5 billion in debt relief for approximately 90,000 people that qualified under less restringent borrower defense rules after the agency rolled back Trump limits in 2021.
With Biden’s extension on student loan forbearance set to expire at the end of September, millions of borrowers are hopeful that the president could deliver timely debt relief. No student loan forgiveness legislation has officially been presented yet. But, based on the president’s campaign promises and other related education agenda, here are three initiatives that could be included in a possible student loan forgiveness plan:
Broaden student loan forgiveness: While progressive legislators are pushing for a student loan forgiveness plan that could cancel up to $50,000 for each borrower (this would wipe out immediately the entire debt for roughly 34 million people who in the second quarter of 2021 owe less than $50,000), Biden’s administration has reaffirmed its commitment to cancelling $10,000 for each federal student loan borrower. This initiative would cancel completely at least $73.8 million in loans, which is the combined amount owed by almost 15 million borrowers with less than $10,000 in debt in the second quarter of 2021.
Revise income-driven repayments: During his 2020 presidential campaign, Biden proposed to “halve payments on undergraduate federal student loans” so borrowers would pay 5% of discretionary income (this is your income after deducting taxes and essential expenses like food and housing) over $25,000 on loans. The president’s income-driven repayment plan would also forgive federal student loan debt after 20 years for borrowers who have made consistent payments. And individuals making under $25,000 annually would “not owe any payments on their undergraduate federal student loans and also won’t accrue any interest on those loans.”