NAVIGATING THE EVER-CHANGING LANDSCAPE OF STUDENT LOAN FORGIVENESS
Given the recent developments, keeping up with Student Loan Forgiveness updates can be overwhelming. But we are here to help! Keep reading for a breakdown of the status of forgiveness programs.
The Supreme Court struck down President Biden’s original plan for Student Loan Forgiveness, still, there have been significant adjustments to existing programs. These changes have made it easier (though still not easy) for borrowers to qualify for relief. We recommend that all our clients with Federal Student Loans review these programs once a year. Rest assured, we are here to assist you in navigating and applying for forgiveness as part of your financial planning.
Breakdown of Forgiveness Programs with estimated relief amounts:
- Public Service Loan Forgiveness (PSLF) program: ~$45 Billion
- In 2021, significant updates were made to this program, which is still being worked on and implemented by the Education Department. These adjustments include changes for individuals with 120 qualifying payments which went into effect earlier this month.
- Income-Driven Repayments (IDR): ~$40 Billion
- Fall 2023 will see more updates as the new repayment plan, Savings for a Valuable Education (SAVE), takes effect. Targeting borrowers with 20-25 years of qualifying payments, this complex program could reduce some borrowers’ monthly payments to $0.
- Borrowers Defrauded by their Schools: ~$22 Billion
- Think of for-profit colleges with snazzy TV commercials.
- Total and Permanent Disability (TPD): ~$5 Billion
- If you qualify for or receive Social Security Disability benefits, you would most likely qualify for this program.
We understand that the plethora of options might seem daunting. To help you navigate the various forgiveness programs for federal student loan borrowers, we recommend checking out the comprehensive summary provided by the Consumer Financial Protection Bureau (CFPB) https://www.consumerfinance.gov/paying-for-college/student-loan-forgiveness/. This resource will be an excellent starting point for exploring the options you may qualify for.
Stay tuned for more updates, as the Biden administration is actively working on new forgiveness plans. These updated plans are gaining support and urgency as they increasingly become a critical re-election campaign issue.
Please watch our Student Loan Video for more information. https://www.frazierfinancial.com/videos/student-loan-updates-2023/
