Over $13 billion in student loans have been forgiven in the past year – here’s who gets it

THROUGH Lake SydneyJanuary 20, 2022, 2:35 PM

Student Borrowers and the Too Much Talent Band thank President Joe Biden and Vice President Kamala Harris for extending the student loan pause and now demand they cancel student debt at a rally outside the White House, as seen in January 2022. (Photo by Paul Morigi/Getty Images for We The 45 Million)

With exactly one year of presidency under his belt, Joe Biden has forgiven more than $11 billion in federal student loan debt through five rounds of forgiveness. This, however, represents only 1% of all federal student loan debt, which currently stands at around $1.8 trillion.

In early January, Pennsylvania Attorney General Josh Shapiro announced that Navient, one of the nation’s largest education loan servicers, would write off $1.7 billion in private student loan debt to resolve allegations of deceptive service practices. This latest decision brings the total amount of student loan debt forgiven over the past year (both federal and private) to approximately $13 billion.

Hundreds of thousands of borrowers have benefited from student loan forgiveness so far, but there are still around 43 million borrowers in debt. That’s because the remission that’s been given so far has gone to targeted groups, as opposed to the broader debt forgiveness that many top Democrats want.

“The Biden administration has a real track record now that we can watch and know what they think about providing student loan relief,” Andrew Pentis, a certified student loan counselor with Student Loan Hero, previously said. . Fortune. “This is a record of relief targeted at specific borrowers, not the mass forgiveness proposals that many progressives have been calling for.

If you’re wondering if you might qualify for one of the rounds of student loan forgiveness this year, Fortune brought together the major groups of currently eligible borrowers.

Borrowers who attended schools that no longer exist

More than 188,000 borrowers will benefit from a $2.6 billion rebate aimed at helping students who attended schools that are now deemed to have engaged in deceptive or illegal practices.

This group includes students who attended Corinthian Colleges, ITT Technical Institute, American Career Institute, Court Reporting Institute, Westwood College, or Marinello Schools of Beauty. These schools were considered to have misled students. Education Secretary Miguel Cardona first announced the cancellations in March 2021.

Prior to the cancellation of these loans, borrowers had to submit a loan release request form, which asks about the student’s previous enrollment. The Federal Office of Student Aid (FSA) then decided to grant a partial or full pardon if the applicant’s school cheated on them. Borrowers began to have their loans automatically canceled from September 2021.

Borrowers with a total and permanent disability

In August 2021, the Department of Education announced a $5.8 billion rebate to erase student loan debt for 323,000 borrowers who have total and permanent disabilities that prevent them from working.

Eligible borrowers must be registered as having a “total and permanent” disability (TPD) by the Social Security Administration (SSA) for the debt to be automatically discharged. Borrowers no longer have to complete a separate application for relief.

The Ministry of Education previously monitored borrowers’ income for three years after receiving TPD status, and if a borrower’s income reached a certain threshold, loans could be reinstated. The ministry, however, announced in August 2021 that it would stop sending these automatic requests for income information and is proposing to remove the long-term monitoring period.

Civil servant borrowers

In October 2021, the Department of Education unveiled sweeping changes to the Public Service Loan Relief Scheme (PSLF), which was developed to provide relief to civil servants – including teachers, firefighters, social workers and other government or non-profit employees non-profit – federal student loan debt. This round of forgiveness accounted for approximately $1.7 billion in federal student loan debt forgiveness.

Officials who applied for full debt forgiveness had to be enrolled in a repayment plan and make 120 student loan payments on time, but 98% of PSLF borrowers who had applied for forgiveness since the program’s inception in 2007 have been denied by the program due to a number of obstacles with the approval process.

Changes to the application and approval process immediately helped 22,000 borrowers, and another 27,000 borrowers are eligible for a collective $2.8 billion forgiveness if they “certify additional periods of employment,” according to the Ministry of Education.

More than half a million borrowers could benefit from long-term changes to the PSLF program if they consolidate their ineligible loans under the federal direct lending program. Fortune previously detailed how PSLF borrowers can have their debt erased.

Borrowers with Navient Private Loans

Nearly 66,000 private student loan borrowers across the United States will benefit from Navient’s cancellations, which came following an investigation by 39 state attorneys general into “allegations of widespread loan servicing practices.” unfair, deceptive and abusive students and abuse in the origin of predatory student loans”. according to a statement released by Shapiro’s office.

According to Navient, the company will write off debt for borrowers who took out loans “largely between 2002 and 2010 and then defaulted and were written off.” These borrowers either received private subprime loans and could not repay them, or Navient had pressured them into forbearance, preventing the borrowers from being able to repay their principal amount.

The company will notify borrowers by July 2022 of who will have their private debt forgiven. Eligible borrowers who made payments after June 30, 2021 on canceled private loans will be reimbursed. Borrowers do not have to do anything more to have their private debt cancelled.

Find out how the schools you’re considering have landed in Fortune’s ranking of top business analytics programs, data science programs and part-time, executive, full-time, and online MBA programs.

About Judith J. George

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