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Here's who qualifies for Biden's student loan forgiveness programs

Borrowers eligible for forgiveness have been in repayment for over 20 years and will soon be notified of the changes.
Posted at 9:04 AM, Jul 14, 2023

The Department of Education announced it will begin forgiving more than 804,000 federal student loan borrowers as a result of fixes "to ensure all borrowers have an accurate count of the number of monthly payments that qualify toward forgiveness under income-driven repayment (IDR) plans."

Borrowers who have been in repayment for at least 20 years are eligible for debt forgiveness. The Education Department said it will be doing a one-time adjustment of IDR plans. 

Borrowers in income-driven repayment plans have long been eligible for forgiveness after 20 years of repayments, but the changes made by the Biden administration broaden what it means to be in repayments. Older borrowers will be those most impacted by the decision. The Department of Education estimates there are 1.5 million borrowers over age 50 in income-driven repayment plans.

The Department of Education said the following will count as time spent in repayment:

- Any months in a repayment status, regardless of the payments made, loan type or repayment plan

- 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance

- Any months spent in economic hardship or military deferments in 2013 or later

- Any months spent in any deferment (with the exception of in-school deferment) prior to 2013

- Any time in repayment (or deferment or forbearance, if applicable) on earlier loans before consolidation of those loans into a single loan

U.S. Secretary of Education Miguel Cardona told Scripps News White House reporter Haley Bull he expects there could be challenges to the decision, saying, "We expect to have opposition."

"Look, we know what we're doing," he said. "We're confident that if we keep our students in higher education access as our North Star, we're always going to be on the right side of this. We want to make sure we're giving folks a fair shake at higher education, that wealth shouldn't determine whether or not you have access to higher education. And we feel pretty proud about that."

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Borrowers with only undergraduate loans or those who have graduate loans and are currently enrolled in the Pay As You Earn plan are eligible for forgiveness after 240 months of payments. PLUS Loans for parents, and borrowers with graduate loans not currently in the Pay As You Earn plan, are eligible for forgiveness after 300 months of payments.

The Department of Education said borrowers who reach the forgiveness milestone before Aug. 1, 2023, are expected to have their loans forgiven before student loan payments restart this fall. 

Those who reach the milestone in August or later will likely have to start making payments, but officials said they would get a refund for any payments beyond the number needed for forgiveness. 

The Department of Education also said that those who enter forbearance and have not reached the 20- or 25-year thresholds won't get credit for the period of forbearance and will need to make eligible payments to reach forgiveness. 

"These folks have been making payments," Cardona said. "And the accounting of the payments made requires that we clean up, address what we felt were practices that weren't good, and make sure that they're doing right by our borrowers, especially if you've been paying for 20 years, we should be counting that correctly."

The Department of Education said it will begin notifying affected borrowers as soon as Friday. All impacted borrowers should receive notification by the end of the year, the department said.

Meanwhile, if you work full time for "a U.S. federal, state, local, or tribal government or not-for-profit organization," including for the U.S. military, public schools, or in emergency management, and if you make 10 years of payments on schedule, you can apply to have the rest of your balance forgiven.

The announcement comes weeks after the Supreme Court shot down President Joe Biden's plan to forgive up to $20,000 in federal student loan debt per borrower for all borrowers making less than $125,000 a year.

@scrippsnews After the Supreme Court struck down Biden’s student #loan forgiveness program last month, the federal government announced Friday that they will be forgiving more than $39 billion in student loan #debt. You can check with your servicer to see if you qualify. #StudentLoanForgiveness ♬ original sound - Scripps News