As election year approaches, President Biden has been highlighting the administration’s efforts in student loan forgiveness. While the Supreme Court blocked a plan to forgive $10,000 to $20,000 in federal student debt per borrower, there have still been significant strides in loan forgiveness, especially for borrowers in public service or on income-driven repayment plans. The administration has approved over $80 billion in forgiveness for various categories of borrowers as of March 2024.
The future of loan forgiveness plans looks promising, with ongoing adjustments to income-driven repayment plans that could potentially lead to automatic forgiveness for millions of borrowers. Additionally, there is speculation that upcoming changes in rules for forgiveness initiatives and bankruptcies could impact the student loan debt landscape. The momentum seems to be shifting towards including student loans in bankruptcy options, with potential for partial or full discharge of debt in certain cases.
The Saving on a Valuable Education (SAVE) Plan for federal student loans is offering additional benefits to borrowers, including loan forgiveness after a certain number of years and a percentage of discretionary income-based repayment plan. This plan makes it possible for borrowers to qualify for $0 monthly payments on their federal student loans and ultimately have their remaining loan balances forgiven. The SAVE plan could provide relief for millions of borrowers, regardless of the amount of student debt they originally took out.
Overall, more student loan forgiveness is on the horizon, with various initiatives from the Biden administration and ongoing adjustments to income-driven repayment plans. The Public Service Loan Forgiveness Program continues to provide relief for borrowers in public service, while borrowers affected by school closures are also expected to receive forgiveness. While the process may not happen all at once, more borrowers are likely to benefit from student loan forgiveness in the near future as these programs continue to evolve and expand.
