The federal government already has a number of programs that offer student debt forgiveness for certain groups of borrowers, usually after they make a specific number of payments.
There’s a debt relief program for nonprofit and government workers as well as one for borrowers who were defrauded by their colleges. Borrowers who are permanently disabled are also eligible for federal student loan cancellation.
Under Biden, some of these programs have been temporarily expanded, making it easier for some borrowers to qualify for forgiveness. The administration has approved more than $26 billion in targeted cancellation for over 1.3 million borrowers — more than under any other president.
Here are five forgiveness programs that currently exist for federal student loan borrowers and what Biden has done to modify them:
1. Public Service Loan Forgiveness
How it works:
The Department of Education began reviewing the first applications for PSLF in fall 2017.
Teachers, social workers, some nurses and doctors as well as government lawyers are some of the types of borrowers who may be eligible.
There are several restrictions. First, a borrower must be working full time for an eligible government or nonprofit for at least 10 years.
Second, a borrower must have federal Direct Loans and have made 120 loan payments under an income-driven repayment plan, which sets payments based on income and family size.
If all of those requirements are met and a borrower has submitted the PSLF form to the Department of Education, the government will cancel his or her remaining federal student loan debt.
How Biden expanded the benefit:
Very few people received forgiveness under the PSLF program when borrowers were first able to qualify in 2017. Many borrowers reached 10 years of repayment believing they qualified for cancellation but instead found out that they had the wrong kind of loan or were making payments in the wrong kind of repayment plan.
Due to a one-year waiver, it no longer matters what kind of federal student loan a borrower has or what payment plan he or she is enrolled in. All payments will be eligible for the Public Service Loan Forgiveness program if the borrower was working full time for a qualifying employer.
2. Teacher Loan Forgiveness Program
How it works:
Both federal Direct Loans and Federal Family Education Loans qualify for this forgiveness program.
How Biden has expanded the benefit:
But this requirement is waived until October 31 thanks to Biden’s temporary Public Service Loan Forgiveness waiver explained above. That means that the period of teaching service that led to eligibility for Teacher Loan Forgiveness can count toward PSLF.
3. Borrower defense to repayment
How it works:
Generally, students who attended big for-profit colleges like Corinthian Colleges and ITT Tech that have been found to have misled students with inflated job placement numbers will qualify for forgiveness under the federal program.
But other students may have to apply for the debt relief, demonstrating how the schools misled them or engaged in other misconduct.
How Biden modified the program:
Under Biden, the Department of Education has made progress in whittling down a backlog of borrower defense claims that built up during the Trump administration.
4. Income-driven repayment program
How it works:
These repayment plans allow borrowers to avoid loan default by lowering their monthly payments based on their income and family size.
How Biden expanded the benefit:
To address the issue, the Department of Education is recounting payments for the vast majority of federal student loan borrowers.
The Department of Education will also now count time spent in forbearance of more than 12 consecutive months or for more than 36 months cumulative toward forgiveness under IDR. The review is meant to help borrowers who were steered into forbearance — which allows for a temporary stop in payments — when they could have benefited from enrolling in an IDR plan.
5. Total and Permanent Disability Discharge
How it works:
How Biden expanded the benefit:
Last year, the Biden administration changed the rule so that the Department of Education can provide automatic discharges for disabled borrowers who are identified through administrative data matching with the Social Security Administration — without the borrowers submitting paperwork.
The Biden administration has temporarily waived the paperwork required during the three-year monitoring period and has also initiated a process to permanently eliminate the requirement.