Biden Student Loan Forgiveness Provides Eligible Borrowers with a Full or Partial Discharge of Loans up to $20,000

President Biden, the Federal Student Aid (FSA), and the Education Department of the country decided to impose changes to the current Public Service Loan Forgiveness Program or commonly known as the PSLF.
This is to benefit more students as well as service workers who have loans to the PSLF and address those denied forgiveness applicants during the previous years. Other student loan forgiveness programs exist within the country.

What is Student Loan Forgiveness?

Loan forgiveness refers to the cancellation of a student’s loan debts. This means that once the loan is forgiven, the student is no longer required to pay back the loan.
Biden student loan forgiveness is beneficial for students who are members of a student loan. This is because they will be free from the burden of paying not just the amount of loan they received but also the accrued interest of the loan.
According to recent reports, there is now a total of 11 Billion US Dollars of loan forgiveness given to an estimated 500,000 or more borrowers under different student loan forgiveness programs.

How is Loan Forgiveness Different from Loan Discharge?

Some may be confused between the terms: loan forgiveness and loan discharge. Let us discuss the differences between the two to better understand what loan forgiveness is all about.
Loan Forgiveness/Cancellation
Loan forgiveness refers to the situation wherein the borrower is no longer required to pay back the loans s/he received due to work or professional services.
Loan Discharge
Loan Discharge on the other hand refers to the situation wherein the borrower is no longer required to pay back the loan s/he received due to either of the following:

1. Permanent disability; or
2. Closure of the educational institution where you received your loans.
There may be other circumstances wherein the borrower can be eligible for a discharge. Take note though that sometimes the two terms (forgiveness and discharge) are used interchangeably.

Who are Qualified for Biden Student Loan Forgiveness?

As of now, the Biden administration continues to give loan forgiveness to qualified individuals.

The PSLF is the one responsible for determining borrowers who are eligible for student loan forgiveness. There is a high probability that you are eligible for forgiveness if you received a loan from either of the following loan programs for students:
Borrower defense to repayment
This type of student loan forgiveness is for students who attended a school that committed misconduct or violations.

Most students who received loan forgiveness under the closed school discharge program are also qualified for loan forgiveness under the borrower defense to a repayment program.
As of July 2021, the program was able to forgive about 1,800 borrowers from the following universities:

1. Westwood College;
2. Marinello Schools of Beauty; and
3. Court Reporting Institute.
Total and/or permanent disability discharge
This is a type of student loan forgiveness that focuses on individuals who are permanently disabled. In this program, the borrower is not obliged to pay their current debts in Federal Family Education Loan or the Perkins Loan.
Further, the individual does not need to undergo a service obligation to be granted loan forgiveness.

Unlike in previous years, you no longer have to undergo a long application process to avail of loan forgiveness since eligible borrowers will be automatically determined based on the individual information records of the Social Security Administration or the SSA.
Public service loan forgiveness
This is also known as the PSLF and it aims to provide loan relief to students who work in a government agency or a non-profit job. Those who were able to pay 120 qualifying payments may be eligible for the PSLF.
However, due to the poor approval rate of the program, 98 percent of borrowers came out to be ineligible for forgiveness.
Fortunately, after the Biden administration reviewed the program, the Education Department finally announced in October 2021 that the PSLF program will make significant changes to its system to make qualifications easier for borrowers.
Closed school discharge
If you are currently attending or just graduated from a university that just closed, you may be qualified for a closed school discharge. The students from the ITT technical institute (a university that is now closed), qualified for this program.
Recently, the education department said to the public that about 500,000 US Dollars worth of student loans from this school is discharged.
Additionally, The loan relief was extended to 1.1 Billion US Dollars, which provided forgiveness to about 115,000 student borrowers who graduated or left the school in the year 2008.
Some loan forgiveness programs do not require you to apply since they use the borrowers’ existing data from the SSA or other government agencies.
Other Types of Loan Forgiveness
Teacher loan forgiveness
This program is specifically for full-time teachers who have worked in a low-income elementary or secondary school and other educational service agencies for 5 consecutive years.
Once determined eligible, you can avail of about 17,500 US Dollars of loan forgiveness on your FFEL or direct loans.
Perkins loan cancellation and discharge
If you have a current Federal Perkins loan, you may be eligible for cancellation or discharge based on your employment services and other volunteer services.

Further, you may also be eligible for a discharge based on other circumstances. You may discuss this with your loan provider to know more details. Usually, cancellation or discharge is granted to eligible teachers.
Discharge due to death
If the borrower was not able to pay back the loan before his/her death, there is a high probability that the dead borrower’s loan will be discharged.

Additionally, in the case of the parent acquiring a PLUS loan on behalf of the student, if unfortunately, the student meets his/her demise, then the loan will be discharged.

Take note that proof of death should be submitted to avail of the discharge.
False certification discharge
If the school you are attending falsely filed your profile as eligible for a loan, you may be eligible for a loan discharge. There are certain procedures you will go through in applying for a false certification discharge based on specific circumstances.
Discharge in Bankruptcy
This certain type of discharge happens in rare cases. Once you declare bankruptcy (a situation wherein paying back the loan can cause inordinate hardship to you and your family), you may become eligible for a discharge.
However, this type of loan discharge comes with thorough processing unlike other types of student loan forgiveness.

The primary requirement to avail of discharge in bankruptcy is to demonstrate the hardship you will face in repaying the amount you have loaned.
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