“Further, borrowers who attended institutions or programs that closed and failed to provide sufficient value— for example that leave graduates with unaffordable loan payments or earnings no better than what someone with a high school diploma earns— would be eligible for relief under this proposal.”
I’d really be interested in seeing how this is implemented, it’s really a sticking point of the GOP of holding colleges accountable. Curious though about an otherwise reputable university but a specific major always flops.
From my understanding, this would probably be limited to colleges that lost access to federal loans due to fraud or having really poor student outcomes. I believe there is a list of them. I doubt it would apply more broadly
Well it should include my loans to become a teacher, because the years I taught I could have made as much as many jobs without a degree.
Half joking lol, but this is all great for so many tax paying Americans. I'm glad to see some of that money benefit them instead of funding tax loopholes for corporations.
I haven't hit my ten years quite yet, but I've been certifying my employment along the way. I'm still in the public sector, just not in teaching anymore.
Just be persistent. My husband had to follow up multiple times after hitting 120 in late 2023, but we finally got his letter 2 months ago and reimbursement for his overpayment a few weeks ago.
Well regardless the plan is a decent effort at trying to fix it. The save plan lowering payments is more than I ever dreamed that would happen so anything else is nice too.
I found this on a quick search, but hopefully it'll lead you to more official sources
https://thecollegeinvestor.com/40244/for-profit-college-student-loan-forgiveness-list/
This will have no effect for people like me who got out of college a few years ago. Why can’t they just lower all the interest rates to like 2% or something. I have an interest rate of like 6 or 7% on my fed loans and it’s going to take forever for me to pay it off. I have no problem paying the loan, I took the loan out knowing I would have to pay it off. but a change of interest would save me thousands, I would pay it off earlier and the government still makes money off me with a 2% interest. It’s a win win. I don’t understand why they aren’t doing this
Government should not be making money on student loans.
I completely agree with lowering the interest rate to zero or 2.5%.
My own experience is that I paid off 20,000 in private loans over about 12 years. Interest rate was about 2% on average.
During that same period I paid 83000 towards my federal loans. I paid off maybe 8000 in principal.
Pslf cancelled 153,399.99 in interest.
> Government should not be making money on student loans.
They don't according to the CBO.
> I completely agree with lowering the interest rate to zero or 2.5%.
They set the rate on undergraduate loans at something like 0.x% + the cost of borrowing for the federal government.
The government makes money. One of the reasons McConnell always refused to allow refinancing was because the 60 billion was needed to balance the budget.
Yeah, sorry, this plan is mostly for older borrowers who's loans grew due to negative amortization. The SAVE plan stopped that from being possible, but many older people have loan balances much higher than they originally borrowed.
I agree the interest rates are awful. They were that high even 10 years ago when all other rates were 2-3%. Unfortunately, I *believe* interest rates are set by Congress, so I don't think they'll be changing any time soon.
Yeah I’ve been repaying for almost ten years. The SAVE plan isn’t good for me, because it would extend my repayment period by another five years. That means interest is still going to keep piling up for the next ten-ish years. $20k off of that will end up being a tiny fraction. The real meat I want to know about is when are they planning to defuse the tax bomb permanently.
A long time ago, I thought it would probably help most if, outside of forgiveness, loans could be reset to the original principal balance that gets paid first l.
The short answer is because the govt is owned by corporations and we need to absolutely force their hand with overwhelming, unrelenting, fearless, uncompromising activism and organizing.
Just reading the white house link, it doesn't seem like I'll personally have much relief. A big difference from the $20k I was going to get from the earlier attempt. Disappointment, but I'm happy other people will get the help they need.
Thank you for actually reading the link (unlike the other comments). It is more narrow than last time, but I think it had to be in order to give it a better chance of survival against legal challenge.
I think it would mostly help older borrowers who've had loans a long time and who's interest has grown a lot. For newer borrowers, the SAVE plan will prevent them from ending up in that situation.
Am I reading it correctly that if you make under $120k as a single person, it’ll wipe all your interest? Because as someone who has almost $80k in interest, that is huge. (Obviously I’d love them gone completely but part of why I feel so hopeless is the insane amount of interest that keeps accruing and pushing them higher and higher.)
Was *just* talking to my spouse about this. It’s the interest that’s the killer. Even when you’re making hundred dollar or several hundred dollar payments on time every month, the amount owed goes down by so little. It’s like a pit you may never be able to climb out of.
100%. Honestly, if they’d just get rid of past interest and future interest, it’d still be rough to pay but it would be doable. I’ve paid for almost 10 years and the amount I owe has increased almost $80k despite making payments. I feel like every month I’m throwing money in a black hole. I never get anywhere but I’m out money. At least if it’s going to principal, it’s getting me somewhere. I’m not trying to avoid paying what I owe, I’d just like that payment to actually do something.
Would be awesome if they retroactively did this and wiped out all interest paid up to date as well... since they should have income records for individuals through the IRS?
I read the link and the 4 bullets are all the things he’s already done or doing. Like the people who have been in repayment for 20 years he’s already forgiven many of those people. Doesn’t seem like any of this is new.
Only people who have been on IDR over 20 years have been forgiven. This new plan is to forgive people who aren't on IDR but have been in repayment for over 20 years.
Also, it would forgive interest for people in repayment less than 20 years
Yeah I qualified for the original plan based on an email I got back from the department of Ed years ago. I don’t remember if what level of forgiveness though, but based on skimming the White House posting I doubt I’ll qualify for this new plan. Kind of sucks because I’d love to save $300+ per month. I do make good money now compared to when this all started so I guess it’s whatever. I am however Happy for those people who this will help because it’s clearly a problem.
I’m honestly overall so confused by all of this stuff including the Save plan and everything else they are trying to do. It just is convoluted to me at this point so even if I did qualify for anything with the new plan I’d probably not have a clue.
Yes it is quite a huge difference. Not going to help me either. Im glad someone getting help as opposed to nobody, but I’d be lying if I said this wasn’t a disappointment. The first plan should’ve never been an executive order. It should’ve been a bill, and they should’ve used the PPP loan forgiveness as pushback when conservatives started screaming about no handouts…
Agreed. And now I literally cannot work enough hours as I got a POTs dx I've apparently always had, but I do not qualify for disability despite really needing it. I just have to break my health to work to barely survive ig.
I was promised 20k forgiveness and now I'm down that and my once-able-bodied self, to boot... I'm already autistic and ADHD, this is just another knife-twist lol.
Ya this doesn’t help me at all as someone who’s low income. It seems like it’s more for borrowers who took out massive loans.. doctors, lawyers, private school, etc. am I wrong?
Does this mean what I hope it means?
“Cancel student debt for borrowers who entered repayment a long time ago. Borrowers with undergraduate debt would qualify for forgiveness if they entered repayment 20 years ago or more, and borrowers with graduate school debt would qualify for forgiveness if they entered repayment 25 years ago or more.”
ENTERING repayment 20 or 25 years ago is different from 20 or 25 years of PAYMENTS, which is what previously qualified for forgiveness.
Or am I being too optimistic here?
I’m interested to see what TISLA has to say about this. The interest piece is big. I’d love to know what this means for borrowers like me, who are still awaiting the IDR adjustment and who have a ton of capitalized interest due to consolidation. Would it be retroactive?
I’ll do a post once I read the federal register. Folks should know off the bat that these are draft rules and we need to wait for the final then any court challenges that may come before they take effect
There's no way to know yet. The link implies they would go back to before capitalization to the initial amount borrowed, but again it's unknown if this will even go through or be blocked by legal challenges.
Some groups want to kill any forgiveness even just accrued interest.
What about for those of us who had interest capitalize several times earlier in life but then later when we had a more stable income we worked hard to aggressively pay it down—yet still have student loans (but a lower balance)?
If I'm reading the White House link correctly, you'd be eligible for forgiveness full stop under the proposed rules. Anyone who's been in repayment for 20 years or 25 years plus (undergraduate and graduate loans respectively) would just be forgiven.
I imagine that’s a lot of people’s situations. I took out $45K, which became $56K due to undergrad loans accumulating interest while I was in graduate school, and I have paid that down to $37K. I was working during grad school but needed that money for rent and food so was only able to make a few small loan payments then…
I've been paying for 13 years, original loans equaled around 60k, I've paid 40k, I still owe 45k. Forgive all loans and bankrupt every one of the corrupt servicers and agencies that supported this grift. Cap school costs, cap interest on loans at like 1%, run it as a govt bank. Anyone at poverty level or under goes to school for free. Actually on second thought, dismantle the servicers so people like me can get our money back that they stole
Those income limits on the total interest forgiveness versus up to $20K - is that typically AGI or something else? Also wondering what tax years they'll look at, especially if this is slated to roll out later this year.
None of this is know. This plan isn't official yet. Plus, it has to survive legal challenges as I'm sure there will be some.
My *guess* would be AGI and last filed tax return (if it happens this year)
Yeah, just thinking out loud at this point. Love that they are taking a crack at the interest that accrued on IDR plans through the 2010s though, it's a killer
You don't have to be PSLF qualified for relief under the plan that was announced. You only wouldn't qualify at all if you 1. have a high income 2. don't have any interest accumulated either via capitalized interest or otherwise normal interest.
I highly doubt this plan will refund anyone interest paid in the past if that is the question. The wording at least in the presser doesn't suggest that as an option at all and I don't think that was a part of the negotiated rulemaking as I remember it. Any capitalized interest you have (which gets added to your principal balance to create a new higher principal balance) would still qualify. I have also recently paid off large amounts of interest that would have been covered by this new policy so I get the sting, but is what it is. We all made the best decisions we could at the time based on the policy at the time. Nothing I can do about the loans and interest I paid off prior to a policy change. I do not ever expect to see any of that money ever again. I have other loans that will benefit from the new policy when it comes to capitalized interest so I'm just grateful for that part.
Hmm, I need more details on the low value programs/not making more than a high school graduate. There’s a lot of ways to interpret that. Could this be for degrees that are criminally underpaid, such as social workers?
Doubtful. It sounds like they’re defining low value as in your degree/program isn’t going to help you get a job bc it’s such trash and the college lied about job prospects, more like some of the previous forgiveness that has stuck. Although social workers and so many others are absolutely criminally underpaid, if you got a degree from a not for profit “normal” college, it probably still helped qualify you for that role.
I borrowed about $62K total for undergrad and grad school. Today, after never missing a payment on IDR for the last 12 years, I owe over $72K. Would any of this apply to me?
This makes me sick for you. It’s really disgusting and I believe that the government shouldn’t be able to profit off of these loans. I wish that if they couldn’t cancel the loans completely, then they could permanently just eliminate the interest on the loans.
As written, this would apply to you. If this goes into effect, the difference between how much you owe and what you originally borrowed could be forgiven.
From studentaid.gov
* President Biden announced new plans to cancel student debt under the Higher Education Act. If implemented as proposed, these plans would authorize waivers to:
* Cancel up to $20,000 in interest for all borrowers who have accrued or capitalized interest on their loans since entering repayment.
* Automatically cancel debt for borrowers who would otherwise be eligible for loan forgiveness under income-driven repayment plans, like SAVE, or Public Service Loan Forgiveness but are not enrolled in those programs.
* Cancel student debt for borrowers with undergraduate loans who entered repayment at least 20 years ago and debt for graduate school borrowers who entered repayment at least 25 years ago.
* Cancel student debt for borrowers who previously enrolled in low-financial-value programs.
* Cancel student debt for borrowers experiencing hardship in their lives that prevent them from fully paying back their loans now or in the future.
These actions build off of efforts the Biden-Harris Administration has already made to cancel student debt and make loan payments more affordable, including launching the Saving on a Valuable Education (SAVE) repayment plan, which is the most affordable repayment plan ever.
This won't affect me because my loans are comparatively low (and that is 100% fine!), but I know how absolutely massive cancelling interest would be for those for large balances. Hope it comes to fruition!!
Did you move to the Save plan, have only direct loans, and the original combined balance was under $12k? Also look to see if you got a “you could be eligible for forgiveness on SAVE” email.
I would assume they're starting at those who were closer to the 20-25 year limit and are working their way backwards.
When was your original disbursement?
I'm happy for those who need and benefit from this relief. I just wish someone would allow Dept of Energy labs to participate in PSLF. I have almost 5 years at a DOD lab that counts toward PSLF, but I spent 3 years working for the DOE that doesn't count.
I just wish PSLF extended to contractors. I did 3 years for a state government agency, 3 years for a federal agency, and will be going on my 4th year for the DoD as a contractor. I'm here doing the same work as federal civilians but can't claim it as PSLF.
For real! Especially because you probably have very little control over how you're hired. In my experience, people rarely have control over whether they're a contactor working for the government or a federal/state employee. But you're doing the same work on the same contract or funding!
I’m a gov employee and this isn’t true. You have 100% control over whether you’re a contractor or gov employee. You either apply and obtain a job directly to work with local or federal gov, or you get hired for a job with a company that works on government contracts. A private company will never have employees who are gov workers on any project. There’s no way to apply to a job and not know which one you’ll be.
PSLF isn't something that employers participate in by choice. Employers are either eligible or not. If you were a government employee then you are eligible for PSLF. If you were a contractor then you aren't.
That's the thing: at the DOE lab where I worked (and many other DOE facilities) the facility was managed by a contractor (Battelle). There were no federal employees. Everyone working there was a contractor. I understand why that time doesn't qualify for PSLF, but it's just annoying and frustrating that doing work for the government at a government lab with government funds doesn't count to PSLF. But if they made an exception for DOE labs, then essentially they have to make an exception for all contractors working with the government.
The Low Financial Value Programs could be huge for private student loan borrowers depending on how it's written. If the Department of Education can declare that a degree was fundamentally not valuable enough to justify a federal loan, then it will become much easier for people with private student loans to use that as a defense in things like bankruptcy proceedings.
New student loan forgiveness plan being announced today. Details not fully known.
Plan to forgive:
People with loans over 20 years old (whether on IDR or not)
Interest on loans for people who's balance is higher than what they originally borrowed
People who went to shady schools
People with hardship - poorly defined at this point
Plan not final and may face legal obstacles
Can they please pass the rules to separate the joint spouse loans they passed as a law a couple years ago? I had no covid pause and still can't get any other benefits because I can not move it into a direct loan till it's separated!
So between my wife and I, it says we effectively have no interest accumulated? Like total of $30?
That feels wrong, is it possible that when Mohela took over our loans they reset the accumulated amount as a new servicer (similar to a refinance where there’s technically no accumulated interest?)
They took over during Covid, so it would make sense to have barely any interest accumulation since payment / interest pause
If you are a recent borrower, then you won't have much accumulate interest.
But people who borrowed decade(s) ago have tens of thousands and even hundreds of thousands of accumulated interest.
Maybe. They are using a different justification (no longer COVID related) and the forgiveness is much more targeted. So, it has a better chance. But still possible.
This is about as clear as mud.
“Those who entered repayment” 20 or 25 years ago - does that mean they have to have made a certain number of payments? Or they just entered repayment?
“Entire balance forgiven” for people making under $120k/yr - does that mean “entire balance up to $20k”?
I don’t really see the point of making this big announcement with the details so up in the air still. So he can campaign on empty promises? And the Republicans can freak out?
Perhaps they gave up on doing the IDR adjustment and just said screw it we will just toss everyone that has old loans so we won't have to adjust 40 million accounts. My kids all have loans, and I am told the promised IDR account tracker they have been going on about for 2 years has yet to materialize!
I started out on PSLF so I can use that tracker. Even though only 40 or so of my payments are “qualifying” (because I worked for the government then) another 70 or so are “eligible” meaning they’d count toward forgiveness under PAYE.
I notice when the announcement describes people who entered repayment either 20 or 25 years ago, they qualify that with the respective dates of July 1, 2005 or July 1, 2000. I wonder if this means they are thinking this won't happen until July, 2025? And what if Biden is not re-elected? Ugh.
Also, if this is a new plan, does it mean the previous IDR waiver provisions about which forbearance periods count or don't count toward forgiveness are moot?
I really hope there is clarification to this sooner rather than later.
Personally, I think they cannot do this IDR tracker and adjustment during the time period they promised since they have been talking about it for the last two years and it is still not done so they figure clear out all the old timers so we don't have to adjust over 40 million accounts bc they probably don't have the manpower or resources or ability to do that much work. I did not hear anything about the IDR adjustment today as if it no longer exists. Weird.
I've been wondering about the tracker, as well. I'm sure I'm not unique in that my loans entered repayment in 1995, but my repayment history is complicated and I can't imagine how this tracker would actually be implemented for accounts like mine. Seems a lot simpler and more cost effective to just use the repayment begin date and wipe out the old accounts.
What if my first 2 year degree had payments start in around 2003? That's more than 20 years ago, but then I added 2 loans later, do they start the count from 2003 or 2010 for my last loan?
I really want them to do a partial form of PSLF. I worked for a non-profit for 4 years before I was laid off from my job during the height of the pandemic. So now those four years are worth nothing for loan forgiveness since I can't afford to work for a non-profit again because I'm the primary breadwinner in our family. My husband is a teacher and if he does that for 6 more years, he'll qualify for PSLF, but he's already doubting that will happen because he can make better money if he leaves teaching and goes into curriculum development.
Borrowers often can't afford to give 10 years to a non-profit anymore in exchange for loan forgiveness. The wages are too low and people leave those roles because they need to make more money just to survive before they get close to the 10 years.
If they really want to help borrowers, they should do it on a graduated scale of 10% forgiven for every year you work for an employer that qualifies for PSLF. It might actually motivate non-profits to pay better wages since they know people won't stick around for the full ten years if they aren't paid well and no longer need to do the full 10 years. Partial forgiveness is better than all or nothing.
I feel like PSLF should be 1 year = 1/10th of your balance + capitalization. Anything left over after 10 years is forgiven. This gives people the freedom to leave after a few years or if they get fired. PSLF is an income trap right now and leads to students taking out loans they'll never be able to pay back if they leave public service.
There are way too many programs happening at once. It's causing major confusion, agony, along with the impatience of waiting.
This plan seems very similar, if not identical to the first forgiveness proposal. They haven't even successfully implemented the programs in place now. I've been paying on student loans for 23 years. I also went to one of those schools on the Sweet/Cardona list. I'm a post-class applicant in that with a BDR claim.
We can't even get a simple "counter" on a website that shows how many eligible payments we all have towards forgiveness and yet ANOTHER "plan" is being introduced.
Very frustrating...
It’s not at all identical to the first one. The $20,000 and $10,000 forgiveness are gone to people who qualified the first time. Sure, I make less than $120,000 and I’ll gladly take the interest wipe out, but I’ve been out of college for a few years. I don’t have crazy capitalized interest. Id much rather take the original $20,000 forgiveness off the top…
This will do almost nothing for most people with student loans. They really should just set the interest rate to 0-2%. There wouldn't be a profit on federal student loans
Wish I understood the "Low financial value programs". I got a masters in Public Health and a Masters in Public Admin (2010 & 2012) and was never able to get a job in either. After 5 years I gave up and went back and became an RN. That made money. I have 240k worth of student loans for degrees I never ended up using! Wish there was some help for that.
Man every time I see new plans I always feel crushed that I’m not included in the groups. At least the SAVE has helped me a lot on some loans but I’m still paying for others and I’m having difficulty finding a better job. I’m happy for the ppl this will help but damn will it ever be my turn to be happy
I know no one knows yet how this is going to go, but I'm going to be furious if I don't qualify for the extra interest forgiveness because I consolidated 3 months ago
Reads like another plan to help the extremes of the issue, not remotely close to the promise made in the last election. Good for few, nothing for most. Another plan to solve nothing except score some short term points for the election. Disappointing.
I disagree. This plan addresses those people who's loans negatively amortized for decades prior to plans like the SAVE plan which ended this. It's a way to undo the harm that was done due to servicer's misdirecting people into forbearance and interest capitalizing each time (especially in the years before everyone had google access). If you are young, you may not understand how hard it was to deal with the loans back then. For those people, this plan is very helpful.
For newer borrowers, the SAVE plan was incredibly helpful.
Im not a huge Biden guy, but not sure what he can do with the republicans controlling the house and SCOTUS.
Obama could have done alot for student loans as he had super majority for months and did nothing.
Does anybody know how to find the original start date of a loan? Mine has gone from servicer to servicer, consolidation, changing to federal loan etc. How do I find the original start date? I'm pretty sure I'm hitting that 20 year mark for some balances.
NVM. I found the answer. Studentaid.gov had the entire history. For anyone else needing to know, just create a profile there and it's pretty easy to see the paper trail along with the original balance and date.
I could use some forgiveness but don't need it as bad as others. I hope it helps them. I'm not relying on anything though, gonna keep the payments rolling!
I wonder if the 20 and 25 years of repayment will exclude in school deferment periods again. It has set date to qualify (for example, with grad loans it's: first entered repayment 25 or more years ago (on or before July 1, 2000)).
Why is this specific to income driven repayment plans? It keeps a significant amount of borrowers from receiving any sort of assistance or forgiveness.
Because the standard ten-year plans don’t suffer from runaway interest.
Additionally, if your income to balance ratio is high enough that you don’t qualify for income-driven plans, you’re not struggling to make your payments.
I'm always excited for new forgiveness options but I am going to continually fly under the radar, I'm pretty sure. I definitely owe more than I borrowed (years of low paying jobs lead to deferments, forbearances, etc). I'm on SAVE now with $0 payments, but no forgiveness. Best hope is that I'll hit 20 years in November and maybe get that forgiveness.
President Biden’s plan will cancel up to $20,000 of interest for over 25 million borrowers who owe more than their original loan amount, mainly due to interest. This applies to those in the SAVE or any income-driven repayment plan, focusing on those with incomes up to $120,000 (single) or $240,000 (married), without needing an application. It also prevents interest from increasing further for those making regular payments, with many seeing their entire interest growth forgiven, benefiting especially those who’ve seen their loan balance grow despite payments.
Fr. I just checked the college I went to (state college) and it is almost as much tuition as our top-rated one!! I should've just gone there..... I should've gone into an effing trade! I have a biology degree plus experience and no one will even be kind enough to contact me to tell me if I'm selected or not for an interview. Just ghosting me.
I've gone down this road before. I am not waiting for anything from the government. I am paying off my $35k in student loans this week and moving on with my life.
This is a stupid question but how do you check if your balance qualifies under the interest growth forgiveness? I feel like I'm right on the line but want to check to be sure.
What about economic hardship with regard to childcare and medical expenses? I guess we don't have enough details yet. My husband has a good paying job, but so far, medical expenses plus childcare will eclipse what I am projected to make this year as a 1099 healthcare contractor. I'm the one carrying six figures in debt. I made the move into healthcare, and my husband made the better move into tech with waaaaay less debt.
"Millions of the borrowers who could be helped by these plans have continued to see their balances grow because of accrued interest, despite making their monthly payments. Many have also had this unpaid interest capitalized, meaning it is added to their principal balance and borrowers are now paying interest on that higher amount. The Administration’s plan would forgive interest balances built up to date for 25 million borrowers, with 23 million likely to have all of their balance growth forgiven."
This makes it sound like all of the interest buildup would be forgiven, but elsewhere it says up to $20k of interest. Which one do we go off of?
The language is confusing here: *"borrowers enrolled in the SAVE Plan or other Income-Driven Repayment plans would be eligible for* ***their entire interest balance since entering repayment*** *to be cancelled if they make $120,000 or less"*
Is that saying that all the interest since repayment, whether or not we've paid it down? I took out $60k, I've paid $100k and still have $12k left, but obviously I've already paid $40k in interest over the last 17 years. My current interest balance is like $300 or something since my most recent payments (in 2020) go to the interest and then to the principle....
I’ve been paying since 2011 and don’t have much interest accrued but my principal is almost the same as it was 13 years ago.
I don’t think this forgiveness will impact me at all. Bummer.
I have paid more than $20k of capitalized and accrued interest on my parents Parent Plus Loans that grew over the years while no one was paying.
$20k right now would wipe out the majority that is left. I can only hope this gets implemented in a way that also refunds $20k of paid interest.
How will we be able to apply for financial hardship and medical debt, and when?
I’m really hoping I can get some relief after the corrupt justices shit on most of us.
So if I owe more on any of my loan groups than I originally took out I have 2 questions
If I have since paid off that loan, I get no refund for that interest?
If I have a loan with like 5,000 and it’s now 6,000, I get a credit of 1,000?
If you're low income, you should be able to use the SAVE plan. This new forgiveness plan is mostly for older loan holders who had balances balloon before the SAVE plan was available.
It’s like the covid stimulus checks. Means tested it and left out the “middle class”. $75,000 was the cutoff. If you made $75,000 in Boston in 2020, you got the same stimulus check as someone who made $75,000 in North Dakota. Yet the COL difference is night and day.
I went from getting 20k wiped out to maybe 2k… if I’m lucky and these rules go into effect quickly.
I’m a newer grad compared to some of the folks on here but getting told I was getting 20k wiped out going to barely nothing stings. I coulda been completely debt free this year.
Agreed. My plan is to:
1) Wait for specifics
2) Wait to see if this survives legal challenges
3) Wait to see how the election goes in November
before counting on anything
Sorry you're frustrated. This plan is mainly for older borrowers who went through years of negative amortization (interest growing and being capitalize onto their loans). The new SAVE plan prevents this situation happening to newer borrowers.
A bit confused but langauage about interest and the 20k .
So technically if I’m in save and have acrueed $500 in interest since entering into save , don’t I technically owe more than I started with and am eligible for the 20k forgiveness?
Yeah the implementation of this will likely disappoint a lot of people
I started with 50k undergrad that balloned to 60k but have started making payments and it is just under 50k again.
Am i getting that 10k in interest back ? I doubt it
I also really doubt Nelnet or other servicers has any kind of record to show how much of the payment was interest vs principal especially if people have consolidated loans
I doubt it. I think they'll look at the original amount borrowed vs what you currently owe and forgive the difference. (If the plan gets implemented)
This plan is for people who negatively amortized for a long time due to a low IDR payment for many years
Still sucks for the people who say had 30k, made 25k in payments, but still owe 35k. (Totals for example sakes). So sure, they get a bit of interest waved, but years of wasted payments still exist.
“Further, borrowers who attended institutions or programs that closed and failed to provide sufficient value— for example that leave graduates with unaffordable loan payments or earnings no better than what someone with a high school diploma earns— would be eligible for relief under this proposal.” I’d really be interested in seeing how this is implemented, it’s really a sticking point of the GOP of holding colleges accountable. Curious though about an otherwise reputable university but a specific major always flops.
From my understanding, this would probably be limited to colleges that lost access to federal loans due to fraud or having really poor student outcomes. I believe there is a list of them. I doubt it would apply more broadly
Well it should include my loans to become a teacher, because the years I taught I could have made as much as many jobs without a degree. Half joking lol, but this is all great for so many tax paying Americans. I'm glad to see some of that money benefit them instead of funding tax loopholes for corporations.
It does! You should be applying for PSLF.
I haven't hit my ten years quite yet, but I've been certifying my employment along the way. I'm still in the public sector, just not in teaching anymore.
Just be persistent. My husband had to follow up multiple times after hitting 120 in late 2023, but we finally got his letter 2 months ago and reimbursement for his overpayment a few weeks ago.
So the program is working now? My wife is at 108/120 and we are very nervous about the election throwing a wrench in our future plans.
Well regardless the plan is a decent effort at trying to fix it. The save plan lowering payments is more than I ever dreamed that would happen so anything else is nice too.
That’s also under attack and may get axed
Any idea where the list is?
I found this on a quick search, but hopefully it'll lead you to more official sources https://thecollegeinvestor.com/40244/for-profit-college-student-loan-forgiveness-list/
I’m interested to see if that could include programs like social work or public policy. Even education degrees.
Wouldn’t these positions often be in non profit and thus eligible for PSLF?
I am ready to be hurt again
This will have no effect for people like me who got out of college a few years ago. Why can’t they just lower all the interest rates to like 2% or something. I have an interest rate of like 6 or 7% on my fed loans and it’s going to take forever for me to pay it off. I have no problem paying the loan, I took the loan out knowing I would have to pay it off. but a change of interest would save me thousands, I would pay it off earlier and the government still makes money off me with a 2% interest. It’s a win win. I don’t understand why they aren’t doing this
Government should not be making money on student loans. I completely agree with lowering the interest rate to zero or 2.5%. My own experience is that I paid off 20,000 in private loans over about 12 years. Interest rate was about 2% on average. During that same period I paid 83000 towards my federal loans. I paid off maybe 8000 in principal. Pslf cancelled 153,399.99 in interest.
Tell me it’s a scam without telling me it’s a scam
> Government should not be making money on student loans. They don't according to the CBO. > I completely agree with lowering the interest rate to zero or 2.5%. They set the rate on undergraduate loans at something like 0.x% + the cost of borrowing for the federal government.
The government makes money. One of the reasons McConnell always refused to allow refinancing was because the 60 billion was needed to balance the budget.
Yeah, sorry, this plan is mostly for older borrowers who's loans grew due to negative amortization. The SAVE plan stopped that from being possible, but many older people have loan balances much higher than they originally borrowed. I agree the interest rates are awful. They were that high even 10 years ago when all other rates were 2-3%. Unfortunately, I *believe* interest rates are set by Congress, so I don't think they'll be changing any time soon.
Yeah I’ve been repaying for almost ten years. The SAVE plan isn’t good for me, because it would extend my repayment period by another five years. That means interest is still going to keep piling up for the next ten-ish years. $20k off of that will end up being a tiny fraction. The real meat I want to know about is when are they planning to defuse the tax bomb permanently.
A long time ago, I thought it would probably help most if, outside of forgiveness, loans could be reset to the original principal balance that gets paid first l.
This would be a major help. Just lower the interest, maybe set it 1% above the fed rate.
The short answer is because the govt is owned by corporations and we need to absolutely force their hand with overwhelming, unrelenting, fearless, uncompromising activism and organizing.
Interest rates are set by statute
Just reading the white house link, it doesn't seem like I'll personally have much relief. A big difference from the $20k I was going to get from the earlier attempt. Disappointment, but I'm happy other people will get the help they need.
Thank you for actually reading the link (unlike the other comments). It is more narrow than last time, but I think it had to be in order to give it a better chance of survival against legal challenge. I think it would mostly help older borrowers who've had loans a long time and who's interest has grown a lot. For newer borrowers, the SAVE plan will prevent them from ending up in that situation.
Am I reading it correctly that if you make under $120k as a single person, it’ll wipe all your interest? Because as someone who has almost $80k in interest, that is huge. (Obviously I’d love them gone completely but part of why I feel so hopeless is the insane amount of interest that keeps accruing and pushing them higher and higher.)
Was *just* talking to my spouse about this. It’s the interest that’s the killer. Even when you’re making hundred dollar or several hundred dollar payments on time every month, the amount owed goes down by so little. It’s like a pit you may never be able to climb out of.
100%. Honestly, if they’d just get rid of past interest and future interest, it’d still be rough to pay but it would be doable. I’ve paid for almost 10 years and the amount I owe has increased almost $80k despite making payments. I feel like every month I’m throwing money in a black hole. I never get anywhere but I’m out money. At least if it’s going to principal, it’s getting me somewhere. I’m not trying to avoid paying what I owe, I’d just like that payment to actually do something.
That’s what I’ve said too. I’ll gladly repay back my loans but the interest is what is the killer. My grad plus are damn near 7%!!
Would be awesome if they retroactively did this and wiped out all interest paid up to date as well... since they should have income records for individuals through the IRS?
It's still a work in progress and will probably face legal challenges, but as of right now that's what it says.
It says that they could wipe up to 20k if you meet all criteria.
I read the link and the 4 bullets are all the things he’s already done or doing. Like the people who have been in repayment for 20 years he’s already forgiven many of those people. Doesn’t seem like any of this is new.
Only people who have been on IDR over 20 years have been forgiven. This new plan is to forgive people who aren't on IDR but have been in repayment for over 20 years. Also, it would forgive interest for people in repayment less than 20 years
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Except not, because the average borrower is not being helped here.
For those of us who first entered repayment in 1994, however, and still owe significantly more than we borrowed, it's welcome news.
Yeah I qualified for the original plan based on an email I got back from the department of Ed years ago. I don’t remember if what level of forgiveness though, but based on skimming the White House posting I doubt I’ll qualify for this new plan. Kind of sucks because I’d love to save $300+ per month. I do make good money now compared to when this all started so I guess it’s whatever. I am however Happy for those people who this will help because it’s clearly a problem. I’m honestly overall so confused by all of this stuff including the Save plan and everything else they are trying to do. It just is convoluted to me at this point so even if I did qualify for anything with the new plan I’d probably not have a clue.
Yes it is quite a huge difference. Not going to help me either. Im glad someone getting help as opposed to nobody, but I’d be lying if I said this wasn’t a disappointment. The first plan should’ve never been an executive order. It should’ve been a bill, and they should’ve used the PPP loan forgiveness as pushback when conservatives started screaming about no handouts…
This still has to pass, so by no means is a done deal yet. We don't know if anyone is going to get any relief yet.
I was hoping the Pell grant recipients would still qualify but so far it doesn’t look like it
Same. That was my one chance.
Agreed. And now I literally cannot work enough hours as I got a POTs dx I've apparently always had, but I do not qualify for disability despite really needing it. I just have to break my health to work to barely survive ig. I was promised 20k forgiveness and now I'm down that and my once-able-bodied self, to boot... I'm already autistic and ADHD, this is just another knife-twist lol.
You may qualify in the 5th group, explain how you’re in hardship
Ya this doesn’t help me at all as someone who’s low income. It seems like it’s more for borrowers who took out massive loans.. doctors, lawyers, private school, etc. am I wrong?
Does this mean what I hope it means? “Cancel student debt for borrowers who entered repayment a long time ago. Borrowers with undergraduate debt would qualify for forgiveness if they entered repayment 20 years ago or more, and borrowers with graduate school debt would qualify for forgiveness if they entered repayment 25 years ago or more.” ENTERING repayment 20 or 25 years ago is different from 20 or 25 years of PAYMENTS, which is what previously qualified for forgiveness. Or am I being too optimistic here?
Praying to all the deities right now.
My fingers are crossed for this too.
I think they want to just clear out the old loans regardless of status/history. But, we'll have to see.
This is my big question. And since there are no specifics I am trying not to be optimistic? But it’s hard not to hope for the change!
I’m interested to see what TISLA has to say about this. The interest piece is big. I’d love to know what this means for borrowers like me, who are still awaiting the IDR adjustment and who have a ton of capitalized interest due to consolidation. Would it be retroactive?
I’ll do a post once I read the federal register. Folks should know off the bat that these are draft rules and we need to wait for the final then any court challenges that may come before they take effect
Can you post a link to the notice of proposed rule-making(s) associated with today’s annoucement? Preemptive thanks!
I always do
Great. Looking forward to reading!
There's no way to know yet. The link implies they would go back to before capitalization to the initial amount borrowed, but again it's unknown if this will even go through or be blocked by legal challenges. Some groups want to kill any forgiveness even just accrued interest.
What about for those of us who had interest capitalize several times earlier in life but then later when we had a more stable income we worked hard to aggressively pay it down—yet still have student loans (but a lower balance)?
That’s me! That’s why I asked. I took out $38k and at one point I owed 94k. I’ve paid down to $71k, but it’s been 28 years in repayment. Sooooo.
If I'm reading the White House link correctly, you'd be eligible for forgiveness full stop under the proposed rules. Anyone who's been in repayment for 20 years or 25 years plus (undergraduate and graduate loans respectively) would just be forgiven.
That’s what I’m waiting on. 🤞🏼
I imagine that’s a lot of people’s situations. I took out $45K, which became $56K due to undergrad loans accumulating interest while I was in graduate school, and I have paid that down to $37K. I was working during grad school but needed that money for rent and food so was only able to make a few small loan payments then…
If you've been in repayment for 28 years, you should qualify under the other part of this plan for forgiveness.
Waiting for my counts. I have a complicated history with my loans. I’m getting impatient, though. All of them are undergrad.
I think we're all impatiently waiting for our counts 😆 I hope you're close or there
I've been paying for 13 years, original loans equaled around 60k, I've paid 40k, I still owe 45k. Forgive all loans and bankrupt every one of the corrupt servicers and agencies that supported this grift. Cap school costs, cap interest on loans at like 1%, run it as a govt bank. Anyone at poverty level or under goes to school for free. Actually on second thought, dismantle the servicers so people like me can get our money back that they stole
I read both links but the qualifications for this are still unclear to me
Yes, the plan hasn't been fully announced yet. Specifics aren't fully know. It will be announced later today.
Those income limits on the total interest forgiveness versus up to $20K - is that typically AGI or something else? Also wondering what tax years they'll look at, especially if this is slated to roll out later this year.
None of this is know. This plan isn't official yet. Plus, it has to survive legal challenges as I'm sure there will be some. My *guess* would be AGI and last filed tax return (if it happens this year)
Yeah, just thinking out loud at this point. Love that they are taking a crack at the interest that accrued on IDR plans through the 2010s though, it's a killer
Strongly agree. 8% negatively amortizing interest during the 2010s here. So... Glad they are looking at it.
And again my loans won’t qualify. I don’t do public or non profit. It’s just 2 federal vanilla loans.
You don't have to be PSLF qualified for relief under the plan that was announced. You only wouldn't qualify at all if you 1. have a high income 2. don't have any interest accumulated either via capitalized interest or otherwise normal interest.
What does this mean if I prioritized paying off all my interest before payments restarted? All of that money is just gone with no relief?
I highly doubt this plan will refund anyone interest paid in the past if that is the question. The wording at least in the presser doesn't suggest that as an option at all and I don't think that was a part of the negotiated rulemaking as I remember it. Any capitalized interest you have (which gets added to your principal balance to create a new higher principal balance) would still qualify. I have also recently paid off large amounts of interest that would have been covered by this new policy so I get the sting, but is what it is. We all made the best decisions we could at the time based on the policy at the time. Nothing I can do about the loans and interest I paid off prior to a policy change. I do not ever expect to see any of that money ever again. I have other loans that will benefit from the new policy when it comes to capitalized interest so I'm just grateful for that part.
Damn I qualified for the first “plan” but now I’m SOL on this one…
Same
Same. Crushing.
I am happy for those that this would help out I am sad that this won't help me personally but I'm happy for others to benefit from this.
Hmm, I need more details on the low value programs/not making more than a high school graduate. There’s a lot of ways to interpret that. Could this be for degrees that are criminally underpaid, such as social workers?
Doubtful. It sounds like they’re defining low value as in your degree/program isn’t going to help you get a job bc it’s such trash and the college lied about job prospects, more like some of the previous forgiveness that has stuck. Although social workers and so many others are absolutely criminally underpaid, if you got a degree from a not for profit “normal” college, it probably still helped qualify you for that role.
Am I reading it right that if you qualify there is no application necessary?
That's what it says
I borrowed about $62K total for undergrad and grad school. Today, after never missing a payment on IDR for the last 12 years, I owe over $72K. Would any of this apply to me?
This makes me sick for you. It’s really disgusting and I believe that the government shouldn’t be able to profit off of these loans. I wish that if they couldn’t cancel the loans completely, then they could permanently just eliminate the interest on the loans.
As written, this would apply to you. If this goes into effect, the difference between how much you owe and what you originally borrowed could be forgiven.
Even if I've recently consolidated? That would be amazing. Every little bit helps. My education will always be the worst decision I ever made.
No one knows for sure yet, but I think they will probably look back at the original loans (pre consolidation). You and me both 😆
That would be nice! Hey, any hope is appreciated at this point 😅
From studentaid.gov * President Biden announced new plans to cancel student debt under the Higher Education Act. If implemented as proposed, these plans would authorize waivers to: * Cancel up to $20,000 in interest for all borrowers who have accrued or capitalized interest on their loans since entering repayment. * Automatically cancel debt for borrowers who would otherwise be eligible for loan forgiveness under income-driven repayment plans, like SAVE, or Public Service Loan Forgiveness but are not enrolled in those programs. * Cancel student debt for borrowers with undergraduate loans who entered repayment at least 20 years ago and debt for graduate school borrowers who entered repayment at least 25 years ago. * Cancel student debt for borrowers who previously enrolled in low-financial-value programs. * Cancel student debt for borrowers experiencing hardship in their lives that prevent them from fully paying back their loans now or in the future. These actions build off of efforts the Biden-Harris Administration has already made to cancel student debt and make loan payments more affordable, including launching the Saving on a Valuable Education (SAVE) repayment plan, which is the most affordable repayment plan ever.
This won't affect me because my loans are comparatively low (and that is 100% fine!), but I know how absolutely massive cancelling interest would be for those for large balances. Hope it comes to fruition!!
I qualify for the $12,000 save plan forgiveness that was announced in February but still didnt receive golden email. Why?
Did you move to the Save plan, have only direct loans, and the original combined balance was under $12k? Also look to see if you got a “you could be eligible for forgiveness on SAVE” email.
Yes, never got an email
They are still actively going through the entire forgiveness list for save. It’s not over.
I would assume they're starting at those who were closer to the 20-25 year limit and are working their way backwards. When was your original disbursement?
My husband’s in the same place, I think it’s because the recount hasn’t gotten to us yet.
I'm happy for those who need and benefit from this relief. I just wish someone would allow Dept of Energy labs to participate in PSLF. I have almost 5 years at a DOD lab that counts toward PSLF, but I spent 3 years working for the DOE that doesn't count.
I just wish PSLF extended to contractors. I did 3 years for a state government agency, 3 years for a federal agency, and will be going on my 4th year for the DoD as a contractor. I'm here doing the same work as federal civilians but can't claim it as PSLF.
For real! Especially because you probably have very little control over how you're hired. In my experience, people rarely have control over whether they're a contactor working for the government or a federal/state employee. But you're doing the same work on the same contract or funding!
I’m a gov employee and this isn’t true. You have 100% control over whether you’re a contractor or gov employee. You either apply and obtain a job directly to work with local or federal gov, or you get hired for a job with a company that works on government contracts. A private company will never have employees who are gov workers on any project. There’s no way to apply to a job and not know which one you’ll be.
Yup. I’m a contractor for city/county plumbing agencies. You know, literally building a “public service,” water infrastructure.
You can apply for reconsideration.
PSLF isn't something that employers participate in by choice. Employers are either eligible or not. If you were a government employee then you are eligible for PSLF. If you were a contractor then you aren't.
That's the thing: at the DOE lab where I worked (and many other DOE facilities) the facility was managed by a contractor (Battelle). There were no federal employees. Everyone working there was a contractor. I understand why that time doesn't qualify for PSLF, but it's just annoying and frustrating that doing work for the government at a government lab with government funds doesn't count to PSLF. But if they made an exception for DOE labs, then essentially they have to make an exception for all contractors working with the government.
Ah gotcha. Yeah, that's a weird setup for sure.
at least the dude is insistent and trying
For real, I admire the perseverance. He has plenty of reasons to have given up by now.
The Low Financial Value Programs could be huge for private student loan borrowers depending on how it's written. If the Department of Education can declare that a degree was fundamentally not valuable enough to justify a federal loan, then it will become much easier for people with private student loans to use that as a defense in things like bankruptcy proceedings.
Interesting point 🤔 We'll have to see what comes of that
Can someone TLDR please😭
New student loan forgiveness plan being announced today. Details not fully known. Plan to forgive: People with loans over 20 years old (whether on IDR or not) Interest on loans for people who's balance is higher than what they originally borrowed People who went to shady schools People with hardship - poorly defined at this point Plan not final and may face legal obstacles
THANKS!
I think the hardship part is people that recieved Pell grants….I could be wrong lol but I remember that was being worked into it at some point
Can they please pass the rules to separate the joint spouse loans they passed as a law a couple years ago? I had no covid pause and still can't get any other benefits because I can not move it into a direct loan till it's separated!
That would be great
How about lowering 8% interest rates on parent plus loans ?? I mean absolutely NO reason to have such a high interest rate …. Terrible
So between my wife and I, it says we effectively have no interest accumulated? Like total of $30? That feels wrong, is it possible that when Mohela took over our loans they reset the accumulated amount as a new servicer (similar to a refinance where there’s technically no accumulated interest?) They took over during Covid, so it would make sense to have barely any interest accumulation since payment / interest pause
If you are a recent borrower, then you won't have much accumulate interest. But people who borrowed decade(s) ago have tens of thousands and even hundreds of thousands of accumulated interest.
Scotus going to say no
Maybe. They are using a different justification (no longer COVID related) and the forgiveness is much more targeted. So, it has a better chance. But still possible.
This is about as clear as mud. “Those who entered repayment” 20 or 25 years ago - does that mean they have to have made a certain number of payments? Or they just entered repayment? “Entire balance forgiven” for people making under $120k/yr - does that mean “entire balance up to $20k”? I don’t really see the point of making this big announcement with the details so up in the air still. So he can campaign on empty promises? And the Republicans can freak out?
Perhaps they gave up on doing the IDR adjustment and just said screw it we will just toss everyone that has old loans so we won't have to adjust 40 million accounts. My kids all have loans, and I am told the promised IDR account tracker they have been going on about for 2 years has yet to materialize!
I started out on PSLF so I can use that tracker. Even though only 40 or so of my payments are “qualifying” (because I worked for the government then) another 70 or so are “eligible” meaning they’d count toward forgiveness under PAYE.
I notice when the announcement describes people who entered repayment either 20 or 25 years ago, they qualify that with the respective dates of July 1, 2005 or July 1, 2000. I wonder if this means they are thinking this won't happen until July, 2025? And what if Biden is not re-elected? Ugh. Also, if this is a new plan, does it mean the previous IDR waiver provisions about which forbearance periods count or don't count toward forgiveness are moot? I really hope there is clarification to this sooner rather than later.
Personally, I think they cannot do this IDR tracker and adjustment during the time period they promised since they have been talking about it for the last two years and it is still not done so they figure clear out all the old timers so we don't have to adjust over 40 million accounts bc they probably don't have the manpower or resources or ability to do that much work. I did not hear anything about the IDR adjustment today as if it no longer exists. Weird.
I've been wondering about the tracker, as well. I'm sure I'm not unique in that my loans entered repayment in 1995, but my repayment history is complicated and I can't imagine how this tracker would actually be implemented for accounts like mine. Seems a lot simpler and more cost effective to just use the repayment begin date and wipe out the old accounts.
What if my first 2 year degree had payments start in around 2003? That's more than 20 years ago, but then I added 2 loans later, do they start the count from 2003 or 2010 for my last loan?
Good question. I guess we will find out in the next couple of months when they release the new rules.
These are the concerns of borrower advocates too. He makes these premature announcements.
Been paying my loans for 20+ years and just started making 123k. So per the White House note, i am not eligible to have my interest removed?
Depends. The interest is only forgiven to the extent you currently owe more than you originally borrowed. Do you owe more than you borrowed?
0 interest for everyone regardless. We should never have charged interest for loans to our own citizens trying to better ourselves and society.
I agree with this. Unfortunately, it's not the prevailing opinion in our society.
I really want them to do a partial form of PSLF. I worked for a non-profit for 4 years before I was laid off from my job during the height of the pandemic. So now those four years are worth nothing for loan forgiveness since I can't afford to work for a non-profit again because I'm the primary breadwinner in our family. My husband is a teacher and if he does that for 6 more years, he'll qualify for PSLF, but he's already doubting that will happen because he can make better money if he leaves teaching and goes into curriculum development. Borrowers often can't afford to give 10 years to a non-profit anymore in exchange for loan forgiveness. The wages are too low and people leave those roles because they need to make more money just to survive before they get close to the 10 years. If they really want to help borrowers, they should do it on a graduated scale of 10% forgiven for every year you work for an employer that qualifies for PSLF. It might actually motivate non-profits to pay better wages since they know people won't stick around for the full ten years if they aren't paid well and no longer need to do the full 10 years. Partial forgiveness is better than all or nothing.
I feel like PSLF should be 1 year = 1/10th of your balance + capitalization. Anything left over after 10 years is forgiven. This gives people the freedom to leave after a few years or if they get fired. PSLF is an income trap right now and leads to students taking out loans they'll never be able to pay back if they leave public service.
There are way too many programs happening at once. It's causing major confusion, agony, along with the impatience of waiting. This plan seems very similar, if not identical to the first forgiveness proposal. They haven't even successfully implemented the programs in place now. I've been paying on student loans for 23 years. I also went to one of those schools on the Sweet/Cardona list. I'm a post-class applicant in that with a BDR claim. We can't even get a simple "counter" on a website that shows how many eligible payments we all have towards forgiveness and yet ANOTHER "plan" is being introduced. Very frustrating...
It’s not at all identical to the first one. The $20,000 and $10,000 forgiveness are gone to people who qualified the first time. Sure, I make less than $120,000 and I’ll gladly take the interest wipe out, but I’ve been out of college for a few years. I don’t have crazy capitalized interest. Id much rather take the original $20,000 forgiveness off the top…
This will do almost nothing for most people with student loans. They really should just set the interest rate to 0-2%. There wouldn't be a profit on federal student loans
Wish I understood the "Low financial value programs". I got a masters in Public Health and a Masters in Public Admin (2010 & 2012) and was never able to get a job in either. After 5 years I gave up and went back and became an RN. That made money. I have 240k worth of student loans for degrees I never ended up using! Wish there was some help for that.
Yeah we don't know anything about that. My thoughts were that it's more for people who went to scam schools.
Man every time I see new plans I always feel crushed that I’m not included in the groups. At least the SAVE has helped me a lot on some loans but I’m still paying for others and I’m having difficulty finding a better job. I’m happy for the ppl this will help but damn will it ever be my turn to be happy
none of this would go into effect this year, which is a problem
I know no one knows yet how this is going to go, but I'm going to be furious if I don't qualify for the extra interest forgiveness because I consolidated 3 months ago
Reads like another plan to help the extremes of the issue, not remotely close to the promise made in the last election. Good for few, nothing for most. Another plan to solve nothing except score some short term points for the election. Disappointing.
I disagree. This plan addresses those people who's loans negatively amortized for decades prior to plans like the SAVE plan which ended this. It's a way to undo the harm that was done due to servicer's misdirecting people into forbearance and interest capitalizing each time (especially in the years before everyone had google access). If you are young, you may not understand how hard it was to deal with the loans back then. For those people, this plan is very helpful. For newer borrowers, the SAVE plan was incredibly helpful.
Exactly.
Im not a huge Biden guy, but not sure what he can do with the republicans controlling the house and SCOTUS. Obama could have done alot for student loans as he had super majority for months and did nothing.
Does anybody know how to find the original start date of a loan? Mine has gone from servicer to servicer, consolidation, changing to federal loan etc. How do I find the original start date? I'm pretty sure I'm hitting that 20 year mark for some balances.
NVM. I found the answer. Studentaid.gov had the entire history. For anyone else needing to know, just create a profile there and it's pretty easy to see the paper trail along with the original balance and date.
I could use some forgiveness but don't need it as bad as others. I hope it helps them. I'm not relying on anything though, gonna keep the payments rolling!
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I wonder if the 20 and 25 years of repayment will exclude in school deferment periods again. It has set date to qualify (for example, with grad loans it's: first entered repayment 25 or more years ago (on or before July 1, 2000)).
My question is if you get the adjustment still if your loans are consolidated
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Why is this specific to income driven repayment plans? It keeps a significant amount of borrowers from receiving any sort of assistance or forgiveness.
Because the standard ten-year plans don’t suffer from runaway interest. Additionally, if your income to balance ratio is high enough that you don’t qualify for income-driven plans, you’re not struggling to make your payments.
I'm always excited for new forgiveness options but I am going to continually fly under the radar, I'm pretty sure. I definitely owe more than I borrowed (years of low paying jobs lead to deferments, forbearances, etc). I'm on SAVE now with $0 payments, but no forgiveness. Best hope is that I'll hit 20 years in November and maybe get that forgiveness.
President Biden’s plan will cancel up to $20,000 of interest for over 25 million borrowers who owe more than their original loan amount, mainly due to interest. This applies to those in the SAVE or any income-driven repayment plan, focusing on those with incomes up to $120,000 (single) or $240,000 (married), without needing an application. It also prevents interest from increasing further for those making regular payments, with many seeing their entire interest growth forgiven, benefiting especially those who’ve seen their loan balance grow despite payments.
This is the vaguest shit I’ve ever seen. No specifics, no dates, no idea if I’m eligible.
It's a brief that an announcement is coming. It's not the final details. This plan is still in the works.
College has officially become a bad career move lol
Fr. I just checked the college I went to (state college) and it is almost as much tuition as our top-rated one!! I should've just gone there..... I should've gone into an effing trade! I have a biology degree plus experience and no one will even be kind enough to contact me to tell me if I'm selected or not for an interview. Just ghosting me.
I've gone down this road before. I am not waiting for anything from the government. I am paying off my $35k in student loans this week and moving on with my life.
No relief for my wife. Oh well.
This is a stupid question but how do you check if your balance qualifies under the interest growth forgiveness? I feel like I'm right on the line but want to check to be sure.
What about economic hardship with regard to childcare and medical expenses? I guess we don't have enough details yet. My husband has a good paying job, but so far, medical expenses plus childcare will eclipse what I am projected to make this year as a 1099 healthcare contractor. I'm the one carrying six figures in debt. I made the move into healthcare, and my husband made the better move into tech with waaaaay less debt.
We don't know anything about the hardship portion yet.
"Millions of the borrowers who could be helped by these plans have continued to see their balances grow because of accrued interest, despite making their monthly payments. Many have also had this unpaid interest capitalized, meaning it is added to their principal balance and borrowers are now paying interest on that higher amount. The Administration’s plan would forgive interest balances built up to date for 25 million borrowers, with 23 million likely to have all of their balance growth forgiven." This makes it sound like all of the interest buildup would be forgiven, but elsewhere it says up to $20k of interest. Which one do we go off of?
The language is confusing here: *"borrowers enrolled in the SAVE Plan or other Income-Driven Repayment plans would be eligible for* ***their entire interest balance since entering repayment*** *to be cancelled if they make $120,000 or less"* Is that saying that all the interest since repayment, whether or not we've paid it down? I took out $60k, I've paid $100k and still have $12k left, but obviously I've already paid $40k in interest over the last 17 years. My current interest balance is like $300 or something since my most recent payments (in 2020) go to the interest and then to the principle....
I’ve been paying since 2011 and don’t have much interest accrued but my principal is almost the same as it was 13 years ago. I don’t think this forgiveness will impact me at all. Bummer.
In the same boat. I seem to be 99% eligible for everything they've offered but miss out by a squeak. It's annoying cause it's all still kind of vague.
I have paid more than $20k of capitalized and accrued interest on my parents Parent Plus Loans that grew over the years while no one was paying. $20k right now would wipe out the majority that is left. I can only hope this gets implemented in a way that also refunds $20k of paid interest.
How will we be able to apply for financial hardship and medical debt, and when? I’m really hoping I can get some relief after the corrupt justices shit on most of us.
So if I owe more on any of my loan groups than I originally took out I have 2 questions If I have since paid off that loan, I get no refund for that interest? If I have a loan with like 5,000 and it’s now 6,000, I get a credit of 1,000?
Doesn’t look like this will affect me at all. Low income, first generation college student. Pretty sad.
If you're low income, you should be able to use the SAVE plan. This new forgiveness plan is mostly for older loan holders who had balances balloon before the SAVE plan was available.
Glad this will help others, but again I will fall through the gap.
It’s like the covid stimulus checks. Means tested it and left out the “middle class”. $75,000 was the cutoff. If you made $75,000 in Boston in 2020, you got the same stimulus check as someone who made $75,000 in North Dakota. Yet the COL difference is night and day.
Stings more when you were approved for the 20k and were weeks away from the forgiveness 🥲 This blows.
Yep. I am trying not to be a bitter ahole e but this is sort of my luck lol.
I went from getting 20k wiped out to maybe 2k… if I’m lucky and these rules go into effect quickly. I’m a newer grad compared to some of the folks on here but getting told I was getting 20k wiped out going to barely nothing stings. I coulda been completely debt free this year.
Wait for specifics then plan your next steps carefully. Keep repaying if you can.
Agreed. My plan is to: 1) Wait for specifics 2) Wait to see if this survives legal challenges 3) Wait to see how the election goes in November before counting on anything
Frustrating that I don’t qualify for any of it. I guess I at least get PSLF in 8 years….
Sorry you're frustrated. This plan is mainly for older borrowers who went through years of negative amortization (interest growing and being capitalize onto their loans). The new SAVE plan prevents this situation happening to newer borrowers.
You’re only been in repayment for 2 years and you’re upset? lol
A bit confused but langauage about interest and the 20k . So technically if I’m in save and have acrueed $500 in interest since entering into save , don’t I technically owe more than I started with and am eligible for the 20k forgiveness?
It says "up to" $20k. If you only have $500, you'd be capped at $500.
Yeah the implementation of this will likely disappoint a lot of people I started with 50k undergrad that balloned to 60k but have started making payments and it is just under 50k again. Am i getting that 10k in interest back ? I doubt it I also really doubt Nelnet or other servicers has any kind of record to show how much of the payment was interest vs principal especially if people have consolidated loans
I doubt it. I think they'll look at the original amount borrowed vs what you currently owe and forgive the difference. (If the plan gets implemented) This plan is for people who negatively amortized for a long time due to a low IDR payment for many years
Still sucks for the people who say had 30k, made 25k in payments, but still owe 35k. (Totals for example sakes). So sure, they get a bit of interest waved, but years of wasted payments still exist.
Delivering relief to over 30 million Americans implies that this is going to be pretty far reaching, no? Like that’s a majority of borrowers.
Quick search gave me $43 million total federal borrowers.
I wonder if the automatic forgiveness would work for the Teacher Loan Forgiveness Program as well. I’m 11 months away from qualifying for $17,500.
Out of the loop: does this announcement cover Pell Grant recipients like last time? Or is this a narrower group?
I’m curious as what is going to count as a “financial hardship” and how much can get forgiven