The Reality of Biden’s Student Loan Plan

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The student loan relief plan proposed by President Biden could completely erase debts for around 20 million borrowers. The emphasis is on “could” because, except for 8 million borrowers with income information already on file with U.S Education Department, all others will need to complete an application attesting their income before they can cancel their debts.

Millions of borrowers anxiously await the mysterious October application. The wait has generated confusion from readers and listeners. NPR was able to ask some of those questions to U.S. Secretary of Education Miguel Cardona during his stop in Pittsburgh on his back-to-school bus tour.

Borrowers earning less than $125,000 per year or married couples earning less than $250,000 can have their federal student loans canceled up to $10,000. Pell Grant recipients who are able to get $20,000 debt relief because they have a lower income can qualify. Even if they are eligible, most borrowers will need to submit an application to prove their eligibility.

NPR wants to know when people can expect to see their debts reduced or even erased.

Cardona replied with “Look, this is unprecedented. Just like there was no playbook for reopening schools, there was no playbook sitting anywhere on how to [cancel student loans]. But we’re going to do it, and we’re going to do it better than people expect.”

NPR moved on to the Public Service Loan Forgiveness waiver (PSLF) at this point. This waiver was used by the Biden administration to reform the troubled program. It made it easier for borrowers working in public service to get debt relief after ten years. This waiver will expire at the end of October. It raises concerns that thousands of qualified borrowers won’t apply.
Cardona’s bus trip this week featured workshops to assist teachers with the PSLF application process.

The waiver ends October 31st, and Cardona’s department is working hard to get this information out. If you are unsure about whether you get the forgiveness, he recommends that you apply. It is better to apply and have your name recorded than to find out later that you weren’t eligible.

So, it means a visit over to PSLF.gov. It has been used by more than 175,000 people. People who choose to work in the public sector have received loan relief of over $10 billion. We want to ensure they are taken care of and that we have their backs, just as they do for the community.

NPT referred to its multiple investigations into how the department and its loan servicers mismanaged federal student aid programs in the last question. These included TEACH Grant and PSLF’s Total Disability Discharge, Permanent Disability Discharge, and even the Income-driven Repayment.

Many borrowers hope the administration will fulfill its latest debt relief plan. However, they are justifiably skeptical about the Education Department’s ability to do it.

In the end, Cardona doesn’t give us much hope. He talks about the many moving parts and the communication that is happening daily with the loan servicers. We’re simply supposed to applaud Biden for campaigning on $10,000 of relief per borrower and be happy that he’s coming through with that promise – even many question whether it’s even legal for him to do it.