On April 8, 2024, the U.S. Department of Education (ED) announced a new set of plans that would provide student loan debt relief for tens of millions of borrowers across the country (Source: ed.gov). These new plans would bring the number of federal student loan borrowers eligible for relief to over 30 million, including the 4 million that have already been approved for debt cancellation through other student loan forgiveness proposals over the past three years.
The latest debt cancellation efforts include initiatives that are part of a regulatory process initiated last summer to provide relief under the Higher Education Act. The rule changes are currently in a period of public comment and are anticipated to become final in the fall.
- Measures to waive accrued interest for certain borrowers.
- Automatic debt discharge for eligible borrowers not enrolled in forgiveness programs.
- Elimination of student debt for long-term repayments.
- Assistance for borrowers enrolled in low-value programs or affected by institutional misconduct.
- Help for borrowers facing financial hardship.
Student Debt Cancellation Overview
In addition to this most recent announcement, other student loan debt cancellation initiatives have also been implemented in the past few months.
- Income-Driven Repayment (IDR) Forgiveness. In July 2023, ED began implementing significant changes to IDR plans, including a one-time account adjustment that retrospectively applies certain repayment periods to accelerate loan forgiveness for IDR borrowers (Source: studentaid.gov). With this adjustment, some borrowers will receive at least three years of credit toward loan forgiveness, with many having their loans forgiven automatically. Loans in repayment for over 20 or 25 years may qualify for immediate forgiveness.
- Public Service Loan Forgiveness (PSLF). ED announced $3.2 billion in PSLF in January 2024, aiding 43,900 borrowers who qualified through the limited PSLF waiver and program improvements. That brings the total amount of forgiveness through PSLF to $56.7 billion for 793,400 borrowers since October 2021 (Source: ed.gov).
- Fast-tracked Relief for Smaller Loans. In February 2024, ED enacted a rule change that will provide faster forgiveness for certain borrowers under the Saving on a Valuable Education (SAVE) Plan. Borrowers who originally borrowed $12,000 or less qualify for forgiveness after as few as 10 years of monthly payments (Source: ed.gov). For every $1,000 over the $12,000 balance threshold, an additional year of payments is required. The maximum repayment period will still be capped at 20 years for those with only undergraduate loans and 25 years for those with graduate school loans.
While student loan forgiveness is helping some borrowers, millions more are still struggling under the burden of student loans. Learn how Attigo can help you help your alums or employees find repayment.