The Biden-Harris Administration has unveiled a comprehensive set of plans that promise relief to tens of millions of student debtors across the United States. These plans, which will extend the total number of eligible borrowers for student debt relief to over 30 million, are a beacon of hope for the 4 million borrowers who have already been granted debt cancellation by the Biden-Harris Administration over the last three years.

The Biden-Harris administration has made significant strides in student loan forgiveness and relief, a testament to its commitment to the welfare of student loan borrowers.

Notable achievements include:

• Over 930,000 borrowers have received nearly $46 billion in relief.
• Public Service Loan Forgiveness: Nearly 872,000 borrowers have received $62.5 billion in loan forgiveness.
• – SAVE Early Forgiveness: This program is designed for eligible borrowers who have made consistent payments for a specific period. Nearly 153,000 borrowers have received $1.2 billion in loans through the shortened time to forgiveness benefit under President Biden’s SAVE Plan.
• – Total and Permanent Disability Discharge: This program is for borrowers who are unable to work due to a total and permanent disability. It applies to all types of federal student loans. Over 548,300 borrowers have received $14.1 billion in loan discharges. The administration has simplified the process of becoming eligible for a disability discharge, with new rules in effect since July 1 of last year.

“These state-by-state numbers show the Biden-Harris Administration’s historic student loan efforts are already improving lives in every part of the country. Thanks to our unapologetic commitment to provide relief to as many borrowers as possible as quickly as possible, our regulatory efforts would help tens of millions more borrowers find financial breathing room—and help fix our country’s broken higher education system.” ~ U.S. Secretary of Education Miguel Cardona.

The plans announced by President Biden are the next step in a regulatory process that began last summer to provide debt relief to as many borrowers as possible as quickly as possible under the Higher Education Act. The proposals would permit the following types of waivers:

Waiving accrued and capitalized interest for millions of borrowers.

More than 25 million borrowers owe more than they originally borrowed, including many who have made years of payments due to the interest that accrues on Federal student loans. President Biden will announce plans to cancel up to $20,000 of the amount a borrower’s balance has grown due to unpaid interest on their loans after entering repayment, regardless of their income.

Low and middle-income borrowers enrolled in the SAVE Plan, or any other income-driven repayment (IDR) plan, would be eligible for a waiver of the entire amount their balance has grown since entering repayment. The SAVE Plan, part of President Biden's comprehensive student loan relief strategy, is designed to make loan repayment more manageable for borrowers. This group of borrowers includes single borrowers who earn $120,000 or less and married borrowers who file joint tax returns who earn $240,000 or less.

If the plan is finalized as proposed, no application will be needed for borrowers to receive this relief. We estimate that of the 25 million borrowers potentially helped by such a waiver, 23 million would see the entirety of their balance growth eliminated.

Automatically discharging debt for borrowers otherwise eligible for loan forgiveness under SAVE, closed school discharge, or other forgiveness programs but not enrolled.

Too many borrowers eligible for relief—including immediate cancellation—have historically been unable to overcome paperwork requirements, bad advice, or other obstacles. While the Department has worked to make it easier to apply for relief, the proposed plans would automatically cancel debt for borrowers otherwise eligible for relief through the SAVE plan, closed school loan discharges, PSLF, or other forgiveness opportunities but who have not successfully applied for that assistance. For instance, borrowers eligible for the shortened period until forgiveness under SAVE could receive help automatically.

This applies to borrowers who initially took out $12,000 or less in loans and have been in repayment for ten years and would be eligible to waive their remaining debt. For every additional $1,000 in loans they took out (up to $21,000 total for undergraduate and $26,000 total for graduate loans), a borrower would be eligible for relief after an additional year of repayment. For example, if a borrower took out $13,000 in loans, they would be eligible for debt cancelation after 11 years in repayment.

Eliminating student debt for borrowers in repayment for 20 years or more

Over 2 million borrowers are still paying off their student loans after two decades or more. To help these borrowers, the Administration has proposed a new plan that would forgive the debt of those who have only undergraduate debt and entered repayment at least 20 years ago (on or before July 1, 2005). If borrowers have any graduate school debt, they would qualify for forgiveness if they first entered repayment 25 years ago or more (on or before July 1, 2000). The proposal applies to Direct Loans and Direct Consolidation Loans that repay only undergraduate or graduate study for 20 or 25 years, respectively. It's important to note that borrowers would not need to be on an income-driven repayment plan to qualify for this relief.

Helping borrowers who enrolled in low-financial-value programs or institutions.

The Administration proposes waiving loans for borrowers who took on debt to enroll in institutions or programs that lost their eligibility to participate in the Federal student aid program or were denied recertification due to fraud or misconduct. Additionally, borrowers who attended institutions that closed and failed to provide sufficient value would be eligible for relief under this proposal.

Assisting borrowers who experience hardship in paying back their loans.

While these proposed plans and executive actions would help tens of millions of borrowers, many other borrowers' student loans continue to hinder their participation in the economy, access to economic mobility, and pursuit of dreams.

The Administration is planning to cancel student debt for borrowers who are facing financial hardship and are unable to pay back their loans either presently or in the future. This action may involve automatic forgiveness to borrowers who are likely to default on their loans or through personalized applications where borrowers can describe the financial difficulties preventing them from repaying their loan in full, such as medical expenses or childcare.

If you’re looking for help with Federal Student Loan benefit programs, or have any questions, please free to contact us at Silver Lion Student Loan Advisors. If you’re an Employer who’d like to offer a Student Loan Repayment Benefit or Student Loan Advisory Service, we’re here to help!