Student Loans

student loan debt, Student Loans

First Wave of Public Servants Awarded Student Loan Forgiveness Through Temporary Program

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The Biden administration recently announced the introduction of a temporary expansion of the Public Service Loan Forgiveness program. The program cancels outstanding student debt for public servants.

In order to be eligible, debt holders must have made 120 payments toward their federal student debt on-time for at least 10 years. The loans must have been made through the federal government and payments must have been made through repayment plans, most of which are based upon income. They must also work for the government or one of the non-profit organizations specified by the program. Many teachers, public defenders, Peace Corps workers, and law enforcement officers may qualify for forgiveness.

student loan debt, Student Loans

Heavily Redacted White House Memo Released Regarding Student Loan Forgiveness

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The White House recently released a memo about canceling debt for federal student loan borrowers, but the text was heavily redacted. This seven-page memo, dated April 5, 2021, was addressed to the U.S. Secretary of Education in consideration of potential student loan forgiveness by the Biden Administration. This memorandum, although heavily redacted, gives some insight into whether the administration has the authority to issue widespread student loan forgiveness.

student loan debt, Student Loans

Navient Will No Longer Service Federal Student Loans- What This Means for Borrowers

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Navient has announced that it will no longer service federal student loans. The company is one of the largest servicers for the U.S. Department of Education. Navient has a massive $1.7 trillion oustanding in its student loan portfolio.

The decision leaves around 6 million borrowers waiting to be matched with a new lender.  With a transition of this magnititude, problems are likely to occur. Here are a few things borrowers should do now if their student loans are getting reassigned to another lender.

student loan debt, Student Loans

What Is Next for Student Loans in the Covid Era?

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Student loans have been at the forefront of the COVID-19 relief offered through the federal government. The biggest source of relief came in the moratorium on federal student loan repayments issued by the Biden administration and was extended through the end of 2021. However, this moratorium is expected to end January 31, 2022, leaving many student loan borrowers left to wonder what is next.

It is estimated that $1.5 trillion in student loan debt is now owed collectively by U.S. student borrowers. Therefore, these measures have widespread effects for many American consumers.

student loan debt, Student Loans

Biden Administration Cancels Almost $10 Billion in Student Loan Debt. Who Got Relief?

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In total, the Department of Education has approved discharging $8.7 billion in student loan debt for more than 450,000 borrowers.

Click here to see if you are eligible.

That amount has included:

  • $7.1 billion for borrowers who were eligible for relief because of “total and permanent disability.”
  • $55.6 million in loan discharges for students who attended three trade schools that officials said misrepresented themselves to students.
  • Another $1 billion for other students defrauded by their schools.

The Biden Administration has cancelled nearly $10 billion in student loan debt since January 2021, according to the U.S. Department of Education. The Department reported they have approved $9.5 billion in student loan discharges since January 2021, affecting approximately 563,000 borrowers.  This has given borrowers the ability to tackle other debts, invest and increase savings.

student loan debt, Student Loans

Student Loan Payment Pause Extended to 2022

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The Biden administration has announced that the moratorium on federal student loan payments would be extended through January 31, 2022. This announcement came just over a month before the pause was set to expire at the end of September. According to the Department of Education, this extension is the final one that will be issued.

The moratorium was first put in place in March 2020 after Congress passed the CARES Act. The moratorium paused payments through the end of September 2020, keeping all federal student loan interest rates at zero percent, affecting approximately 42 million federal borrowers. President Trump then issued an executive order to extend the student loan payment pause through January 2021. As soon as President Biden took office, he issued another executive order extending the pause through September 30, 2021.

Please click here to read more.

student loan debt, Student Loans

Biden Administration Cancels Additional $55.6 Million in Student Loan Debt

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The Biden Administration canceled an additional $55.6 million in student loans for 1,800 students who were found to be victims of fraud. This additional amount brings the total amount of student loan debt cancelled by the Biden administration to $1.5 trillion. 

Since entering office, President Biden has made it his mission to stand up for the thousands of students who were taken advantage of by for-profit colleges. This most recent effort was focused on students who attended Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute. Previously, the administration had approved loan forgiveness for students who attended ITT Technical Institute, the American Career Institute and Corinthian College. This is the first time the Department of Education has approved loan forgiveness for students attending for-profit schools not including these three.  

student loan debt, Student Loans

Former ITT Tech Students Receive Debt Relief from Biden Administration

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The U.S. Department of Education announced Wednesday that 18,000 former ITT Technical Institute students who were found to be defrauded by the shuttered for-profit university will have their federal student loans cancelled in full. This move is a step in the right direction. The for-profit school closed permanently in 2016, leaving tens of thousands of students with massive student loan debt, and no degree.  

More than 30,000 former students petitioned the Department of Education to cancel their debt under the “borrower defense to repayment law.” However, even after being defrauded by ITT Tech, their claims were denied by officials under the Trump administration.  

student loan debt, Student Loans

Do Student Loans Have a Statute of Limitations?

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When it comes to most debts, any time the individual who owes the debt stops making payments, the debt will then go into collections. At that point, the original creditor can make the decision to sue the person owing the debt for the remaining balance. However, the creditor only has so long to file that lawsuit. Like any other cause of action, a statute of limitations places restrictions on how long the creditor has to pursue collection of what is owed.  

Each state has its own statutes of limitations, but when it comes to federal student loan debt, federal law governs how this debt is collected. Federal student loans are not governed by the same rules as most consumer debts. In fact, federal student loans do not have a statute of limitations at all, no matter how old they may be.  

student loan debt, Student Loans

What $10,000 in Student Loan Cancellation Would Look Like

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Lawmakers have been calling upon President Biden to move forward with an executive order that would cancel up to $50,000 in federally backed student loan debt. Other amounts have been considered, the lowest amount being $10,000. How this cancellation would look across the country would vary, however, depending on the state and the borrower.  

According to the Student Loan Hero, $10,000 in student loan forgiveness would cost approximately $315 billion. This amount of loan forgiveness would erase outstanding student loan balances for 34 percent of all student loan borrowers, according to their review of Department of Education data.