While the Biden administration withdrew its plans to forgive student loan debt for millions of people, borrowers should look into the many other existing debt cancellation opportunities, experts say.
The U.S. Department of Education posted notices in the Federal Register in December that it was pulling its wide-scale loan forgiveness plans. The Department cited “operational challenges,” and experts say political difficulties likely also played a role.
Republican-led states have filed lawsuits to stop nearly all of President Joe Biden’s previous efforts at eliminating education debt. Meanwhile, President-elect Donald Trump is a vocal critic of student loan forgiveness, and on the campaign trail called Biden’s attempts “vile” and “not even legal.”
As a result, at least for the foreseeable future, federal student loan holders should not expect a wide-scale debt forgiveness policy, experts said.
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There is good news, however. There are a still a number of more targeted student loan forgiveness programs available to individual borrowers.
Affordable repayment options with forgiveness
The U.S. Department of Education’s income-driven repayment plans can be a great option for borrowers with worries about how to pay their bills and hopes for eventual debt erasure, experts say.
IDR plans set your monthly bill based on your income and family size — and lead to loan forgiveness after a certain period, often 20 years or 25 years.
The Biden administration tried to make available a new IDR plan that would have lowered many borrowers’ payments even further compared with the existing plans, and forgiven the debt sooner.
However, that program, the Saving on a Valuable Education plan, is tied up from GOP-led legal challenges and faces an uncertain fate in the upcoming administration.
Still, there are a number of IDR plans that remain open to borrowers.
Borrowers should first check to see if they qualify for the Pay as You Earn Plan, or PAYE, said higher education expert Mark Kantrowitz.
That’s because it tends to be the most affordable option.
For example, your monthly bills can be limited to 10% of your discretionary income and your debt may be wiped out after 20 years. Under the plan, borrowers also make no payments on the first $22,590 of their income as an individual, or $46,800 for a family of four, according to a Dec. 18 press release by the Education Department.
There are several tools available online to help you determine how much your monthly student loan bill would be under different plans.
Federal and state student loan forgiveness
For now, the Education Department still offers a wide range of student loan forgiveness programs, including Public Service Loan Forgiveness and Teacher Loan Forgiveness, experts said.
PSLF allows certain not-for-profit and government employees to have their federal student loans cleared after 10 years of on-time payments. Under TLF, those who teach full-time for five consecutive academic years in a low-income school or educational service agency can be eligible for loan forgiveness of up to $17,500.
At Studentaid.gov, borrowers can search for more federal relief options that remain available.
Meanwhile, The Institute of Student Loan Advisors has a database of student loan forgiveness programs by state.
For example, in California, licensed mental health professionals who work at certain facilities for a set amount of time may be eligible for up to $15,000 in loan assistance.
The Maine Dental Education Loan Repayment Program offers a total of $100,000 in student loan repayment assistance to dentists in underserved areas of the state.
Other state programs may offer forgiveness based on your finances rather than your occupation.
In New York, the Get On Your Feet Loan Forgiveness Program allows certain residents to get up to 24 months of their income-driven repayment plan payments forgiven. Among other qualification requirements, borrowers must have an adjusted gross income of less than $50,000 a year.