US President Joe Biden arrives to board Air Force One at Joint Base Andrews in Maryland, on August 15, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images
It’s never been a better time to get rid of your student debt.
Although President Joe Biden‘s plans to cancel up to $400 billion in student debt for tens of millions of Americans were foiled over the summer at the Supreme Court, his administration has explored all of its existing authority to leave people with less education debt.
As a result, more than 3.7 million Americans have received loan cancellation during Biden’s time in office, totaling $136.6 billion in aid.
In a recent exclusive interview with CNBC, Rep. James Clyburn, D-S.C., who has been a vocal advocate for student loan borrowers, said he’s heard from the U.S. Department of Education that every two months over the next four years, another 75,000 people will be eligible to have their debt forgiven due to changes in income-driven repayment plans and Public Service Loan Forgiveness.
Here’s what borrowers should know about those programs and other aid options.
Income-driven repayment plans, which date to 1994, allow student loan borrowers to pay a share of their discretionary income toward their debt each month, and to get any remaining debt forgiven after a set period. There are four different plans.
Yet many borrowers paid into the system for years 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 former 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 $45 billion in debt cancelation.
Most people with federal student loans qualify for income-driven repayment plans, and can review the options and apply at Studentaid.gov.
Recently, the Education Department also announced it would soon cancel the debts of those who’ve 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 Saving on a Valuable Education, or SAVE, plan.
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