Biden's Student Loan Forgiveness Plan Favors Income-Driven Repayment, But Leaves Out Many Under 40
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Recently, the Biden Administration announced a plan to forgive $39 billion in student debt for approximately 800,000 qualifying borrowers in income-driven repayment plans. However, this plan does not provide significant assistance to those under the age of 40. Here are the latest facts regarding student loan debt forgiveness and relief:
1. Biden's plan is restricted to income-driven repayment plans
The student loan forgiveness of $39 billion will be accessible only to borrowers who have enrolled in repayment plans based on their income. Therefore, borrowers who have not enrolled in these plans will be ineligible for the loan forgiveness.
2. Furthermore, the Supreme Court invalidated a past plan of debt relief
During June of 2023, a debt relief plan for student loan forgiveness was invalidated by the Supreme Court; this plan would have given relief to borrowers who were deceived by their educational institutions. The court ruled that the plan was excessively broad and lacked sufficient direction for establishing who is eligible for relief.
3. Some borrowers have already been granted relief from their debt
Despite setbacks, certain borrowers have already received student loan forgiveness debt relief. For instance, in July 2023, the initial batch of borrowers had their student debt cleared under a novel program that forgives student loans of up to $10,000 for borrowers who had defaulted for at least 10 years.
4. Relief from student debt is offered by state and federal programs
Residents can take advantage of various state and federal programs that offer relief from student debt, following the Supreme Court's ruling. Connecticut, for example, has a program that waives up to $5,000 in student loans for borrowers who have resided in the state for at least five years and whose household income is below $50,000.
5. Be cautious of scams related to student loan forgiveness
As Joe Biden's debt relief plan is being executed in the Supreme Court, scammers are exploiting students by offering to assist with student loan forgiveness. Borrowers must exercise caution regarding any phone or email communications that claim to offer debt relief and work only with trustworthy institutions.
To sum up, though the debt relief plan of the Biden Administration that forgives $39 billion of student loan is moving towards the right direction, it excludes a lot of borrowers who are under 40 and haven't enrolled themselves in income-driven repayment plans. Borrowers must look into other state and federal programs that offer debt relief and also be careful of scams related to student loan forgiveness.