Biden cites student loan forgiveness fixes in State of the Union

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Biden cites student loan forgiveness fixes in State of the Union

US President Joe Biden delivers the State of the Union address in the House Chamber of the US Capitol in Washington, DC, on March 7, 2024. 

Shawn Thew | Afp | Getty Images

1. Income-driven repayment plans

Income-driven repayment plans, 

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, set borrowers’ monthly payments based on a share of their discretionary income. Those payments are typically lower than under standard repayment, and can be zero under some plans. Borrowers get any remaining debt forgiven after a set *******. There are 

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 different plans.

Yet many borrowers paid into the system for decades without getting that promised cancellation, said higher education expert Mark Kantrowitz.

“The loan servicers weren’t keeping track of the number of qualifying payments,” Kantrowitz said in a previous CNBC interview.

The Biden administration has been evaluating millions of borrowers’ loan accounts to see if they should have had their debt forgiven. So far, more than 930,000 people have benefited, receiving over $46 billion in debt cancelation.

Most people with federal student loans qualify for income-driven repayment plans, and can review the options and apply at 

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.

Recently, the Education Department also announced it would cancel the debts of those who have been in repayment for a decade or more and originally took out $12,000 or less. To qualify, borrowers need to be enrolled in the administration’s new 

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2. Public Service Loan Forgiveness

Navigating the Public Service Loan Forgiveness program has been famously difficult. 

The program, signed into law by former President George W. Bush in 2007, allows employees of the government and certain not-for-profit entities to have their federal student loans discharged after 10 years of on-time payments.

The Consumer Financial Protection Bureau in 2013 estimated that one-quarter of ********* workers 

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However, after getting wrong information from their servicers about the program’s requirements, millions of borrowers hit walls. People frequently found that some or all of their qualifying payments didn’t count because they had a loan or were enrolled in a payment plan not covered under the initiative.

The Biden administration has tried to reverse the trend of borrowers being excluded from the relief on technicalities. It has broadened eligibility and allowed people to reapply for the relief, as long as they were still working in the public sector and paying down their debt.

About 790,000 public servants have gotten their debt erased as a result, amounting to more than $57 billion in relief.

With the PSLF help tool, borrowers can search for a list of qualifying employers under the program and access 

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. They can also learn about all the program’s requirements at 

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.

The remaining loan forgiveness of the $138 billion total has gone to borrowers who attended schools of questionable quality, to those who qualified through the

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and to disabled borrowers under the 

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Breaking News: Politics,Joe Biden,Joe Biden,George W. Bush,Personnel,Personal finance,Personal loans,Politics,business news
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