State of the Facts
The Biden administration relieved 563,000, or 1.3% of all borrowers of their student loan debt this year. The cancelled loans were less than 1% of the student debt owed in the US. Nearly 43 million people collectively owe $1.59 trillion in student debt, according to data from the office of Federal Student Aid. The Department of Education cancelled about $9.5 billion in student loans since early 2021. It has also paused all student loan repayment, interest, and collections through the end of January 2022.
The Department of Education will forgive student loans loan interest for three types of borrowers.
In August, the Education Department announced that 323,000 people with total and permanent disabilities will no longer have to pay back their student loan debt. The action discharged $5.8 billion in student loan debt. The department also stopped requiring disabled borrowers to submit paperwork proving income earnings to qualify for student loan discharge. The change impacted more than 41,000 disabled borrowers who had $1.3 billion loans reinstated because of missing proof of income.
Students who were defrauded by failed for-profit schools are also eligible for federal student loan discharges. Those who attended the now-defunct ITT Technical Institute qualify for student loan forgiveness. The Education Department discharged $1.1 billion in loans, affecting 115,000 borrowers who attended the school. The department also said it would approve borrower defense claims  for 1,800 student borrowers who attended the Court Reporting Institute, Westwood College, or Marinello Schools of Beauty, wiping out a total of $55.6 million in student loan debt.
Current and former active-duty service members qualify for a student loan interest waiver under a benefit created within the Higher Education Act. In 2019, about 4,800 borrowers received this benefit. This year, a new Education Department process waived the paperwork requirement and automatically signed borrowers up for the benefit. More than 47,000 eligible borrowers had their loan interest waived in 2021, more than nine times the number of people than in 2019.
Some student loans can be forgiven based on the borrower’s job. These programs are designed to encourage employment in sectors that benefit the public.
Full-time teachers who work five consecutive years at a low-income elementary school, secondary school or educational service agency may be eligible for up to $17,500 in student loan forgiveness under the teacher loan forgiveness program.
The public service loan forgiveness program cancels the remaining balance of loans for those working in full-time for a government or not-for-profit organization and have made the equivalent of 10 years of consecutive payments on their loans. About 1.2 million Americans are qualifying borrowers under the public service loan forgiveness program, according to the office of Federal Student Aid. In 2021, they owed a cumulative $123.8 billion in loans. A total of $452.6 million in loans have been discharged under the program.
Death, false eligibility for a loan, and, in rare cases, bankruptcy, may qualify borrowers for discharged loans. Borrowers with Federal Perkins loans have access to a separate forgiveness program. Under the program, borrowers with specific jobs can qualify for loan forgiveness.
Members of Congress and political candidates have suggested various student loan forgiveness proposals in the last few years. Learn more about how those proposals could affect student loan debt and who would benefit.
Borrower defense claim may be made when a student takes out a loan to attend a school and the school fails to do something related to the loan or the educational service the loan was intended to pay for, according to the the office of Federal Student Aid.
Student loan forgiveness or cancellation is referenced when a job qualifies an individual from no longer needing to make payment on their loans. Student loan discharge refers to when an individual is no longer required to make loan payments due to other circumstances such as total and permanent disability or school closure where the loan was received.
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