Biden administration to forgive $7.4 billion in student debt for another 277,000 borrowers

[BumRushDaShow]

Source: CNBC

Published Fri, Apr 12 2024 5:00 AM EDT


The Biden administration announced Friday that it will forgive $7.4 billion in student debt for 277,000 borrowers.

The latest round of loan cancellations is a result of the U.S. Department of Education’s recent changes and improved oversight of income-driven repayment plans and the popular Public Service Loan Forgiveness program.

“As long as there are people with overwhelming student loan debt competing with basic needs such as food and healthcare, we will remain relentless in our pursuit to bring relief to millions across the country,” U.S. Secretary of Education Miguel Cardona said in a statement.

Here is who benefits from this round of forgiveness

In this round of forgiveness, more than 206,000 borrowers will collectively get $3.6 billion in debt erased through the Biden administration’s new Saving on a Valuable Education, or SAVE, plan, due to the provision that allows for debt forgiveness after shorter periods than other income-driven repayment plans for those who originally took out small amounts for college.

Read more: https://www.cnbc.com/2024/04/12/biden-to-forgive-7point4-billion-in-student-debt-for-277000-borrowers.html

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Link to White House PRESS RELEASE - President Joe Biden Announces $7.4 Billion in Student Debt Cancellation for 277,000 More Americans, Pursuing Every Path Available to Cancel Student Debt

[SoFlaBro]

1. I wish there was some form of civic service tied to this forgiveness. Fucking tutor kids in a poor neighborhood and shit

[underpants]

3. There is. PSLF

Public Service Loan Forgiveness

If you work for a governmental or charitable organization, and have the right kind of Federal Loan (you can change your loan to comply), and pay for 10 straight years you can get your loan forgiven. I had applied for this and was expecting 1 more year of payments (even though I’d made every payment on time for 120 months) when my loan got wiped out last August.

[SoFlaBro]

14. I need to look into this. This is a VERY important detail lost on many people that will help with support.

[underpants]

16. I don't think there's a time requirement for the employment part

Having the right loan is time consuming. I was on the phone for hours. Another party handles transferring the loan and I have no idea why other than dipping in for cash.

[SoFlaBro]

17. So every hand that touches the loan gets a goddamn taste?!?

[underpants]

19. Yep. Probably

[AllyCat]

23. I believe so. Department of Ed contracts out to a company to manage the loans

and the forgiveness programs. You can imagine that the loans make the company way more money than forgiveness does. They have NO incentive to let borrowers know their loans don't qualify or they don't have enough payments. Department of Ed is ending the contracted business and moving it all in house so they can manage it better.

I've had my loans with: Sallie Mae, Great Lakes, Nelnet, and lastly, Mohela. All have made damn sure I didn't know until it was too late that I could have qualified for PSLF. Or that my loans could be consolidated to something that qualified...but they didn't tell me. Or telling me I hadn't made 120 payments after paying for 19 years.

Right now, I have paid for so long, I am entitled to some of the money back on PSLF waiver for making far more than the 120 payments. Working now to wrest it out of Mohela and Nelnet. One guy I know fought them for a year and just got the money last week.

[SoFlaBro]

29. Then it is past-due time to end the grifting money train of student loan lenders that got fucking fat.

[scarletlib]

5. I am all for public service. A paid term of service in for all Americans entering adulthood & in a field they choose.

They could choose from a list of options.

However, this country screwed up when it made debt a necessity to get higher education. The debt a lot of these people have far exceeds the original amount they received. Many have paid the original balance and are just paying usurious amounts of interest.
We can all thank Reaganism for that.

It is in a nation’s best interest to have an educated citizenry.

Most European and many other countries have free or very inexpensive higher education.

[ClaudetteCC]

13. I like the european model of making it accessible to all

rather than changing the rules after the game has been played. I don't expect much enthusiasm for this from people who wanted to attend college but did not as they didn't want or weren't able to take on the debt. If there is debt forgiveness I'd rather see it come at least partly from the universities rather than fully from the federal budget.

[AllyCat]

25. The game has been played on the borrowers.

For instance, PSLF allows public service employees (government, working for non-profits, etc) to make ten years of payments (120) and then be eligible for forgiveness. It was put in place in 2007, but was next to impossible to qualify. The rare borrower met the terms. Biden changed things during covid to clarify and help borrowers meet the requirements. That is the bulk of what is getting forgiven right now.

I agree with the European model as well, but the way the game is played right now is like a casino where the house always wins. The interest on these loans is ROBBERY. Those that pay them off are in a good spot. For many, they owe 4x more than they ever borrowed. They will never get out of debt. That is money going to the debt issuers, not into our economy.

College should not cost this much. Public schools are getting their budgets slashed by crummy Republican legislatures. They have to raise tuition to pay their people. The universities often don't have the money. Private colleges sure do.

I'm all for the forgiveness for whatever reasons he comes up with and celebrate anyone receiving forgiveness right now.

The loans are usurious.

[uncle ray]

7. you'd do well to dig into the details of the forgiveness plan.

it's not simply paying off the debt of people who borrowed excessively. there are plenty of details linked in the article explaining the hows and whys of the changes, such as doing away with accrued interest by retroactively changing the rules for forbearance, etc.

this really should not have you swearing mad at Biden and borrowers, Bro.

[SoFlaBro]

15. Who the fuck says that I am mad at Biden? I think it is a great plan.

[Think. Again.]

2. Biden understands the importance of...

...having an educated population.

When we look around at the damage being done to society by the masses of trumpers without critical thinking skills, it isn't hard to see why education should be affordable, if not free.

[AllyCat]

4. I got my letter yesterday!

Really had very little left to pay but working for a non-profit for 2 decades. I finally got my loans forgiven.

[BumRushDaShow]

6. Congrats!

[AllyCat]

11. Thank you!

[Deuxcents]

26. 👏 I am happy for you and all those who were trapped in a never ending struggle

MAGA’s going crazy about it but the wealthiest getting tax breaks are just fine. 🤯

[Farmer-Rick]

20. My daughter worked for several years

With the Alzheimer's Association. It's obviously nonprofit. But because it wasn't 10 or 20 years they just pretended it was like any other poorly paid job

But when Biden came along, he credited even those years.

There are a lot of people who couldn't afford to work with such poor pay in not profits and charities.

But the truth of the ballooning student debt is not that a lot more people are getting student loans, it is the ever compounding interest.

The interest is added into the existing loan and then they charge interest on the interest. Then they add interest on the interest on the interest. Much like a loan shark.

That turns a $60,000 loan into a $120,000 loan, even though $20,000 was paid off.

[AllyCat]

21. The interest is OBSCENE. The interest is a major part of the problem.

Most of the people getting these loans forgiven has long ago repaid the principal. Now, they are just paying the bank. I consolidated with Mohela and now even they are in trouble with the Department of Education which will be taking over all of the accounts. Should not have contracted with these outside agencies, but they are correcting it. Biden is making it so people could actually qualify for the forgiveness that had been put in place and then, like your daughter, IMPOSSIBLE to ever meet the requirements.

[Johnny2X2X]

8. Biden did too much on Student Loans and now the courts will decide

I have been here for years talking about his SAVE repayment plan and how much of a game changer it was, it basically solves the student debt crisis permanently. But he kept offering forgiveness and it became such an issue that several GOP states are now suing and his repayment plan that is saving borrowing 60% or more a month on their payments is being challenged in court.

[happy feet]

9. Biden did the right thing

Republicans are going to sue anything they don't want that benefits the average citizens versus the uber rich.

[Johnny2X2X]

10. Some of this forgiveness seems a bit much

When the new rules for repayment were being discussed I atteneded the online meetings to keep up on the details. The Pay as You Earn option was changed dramatically so that Federal loan payments would be affordable to anyone no matter how much they made. I remember thinking how good it was that they weren't bragging about it because the GOP would ruin it if they found out how much this was going to help millions of regular Americans.

SO I think at issue is the forgiveness at the end of the 20 year period of making payments. HIgh amount borrowers could see massive ammounts forgiven at the end of their 20 years of making payments. So my guess is worst case scenario wwill be that the 20 year period will be extended. I don't think the courts can rule that the Department of Education didn't have the aurthority to offer these new repayment plans, but they'll say the forgiveness at the end has to be changed.

And I am shocked at how little attention the SAVE proigram has gotten, it is a total game changer for most borrowers. My payments went from $850 a month to $375 a month. My sister's payments went from $700 a month to $225 a month. I know someone whose payments went from $350 a month to $100 a month.

[AllyCat]

12. It didn't help me. Mine would have more than doubled.

I think it helps many. I got PSLF discharge yesterday. I’m thrilled.

[Grins]

18. This should be restricted. It should deny relief...

…to any applicant who is a Republican because their Party is vehemently AGAINST providing that relief.

Not that they would apply, of course. They are self-made rugged, pull up your own damn bootstrappin’ individualists who hate “Soshilism!” and would NEVER accept that money.

Amiright???

[AllyCat]

22. No, maybe some of those Republicans will realize they were helped and vote Biden.

Especially the younger female ones.

[maxsolomon]

24. The Student Debt Crisis-crowd has moved on.

Where once they furiously demanded he deploy a Magic Wand to wipe out all Student debt, Biden's now "Genocide Joe", and Student Loans are off their radar. I can't see this years-long piecemeal approach (which was the only possible path) getting him much credit in November.

I wish I wasn't cynical about this.

Hopefully the campaign is prepping an onslaught of "grateful beneficiary" ads to pound these programs into the heads of America's 400,000 dumbest voters.

[AllyCat]

27. Many of the borrowers are in their 30s, 40s, 50s, and even 60s and 70s.

My dad was in his 80s when he died, still paying of the student loan for my brother. It's the folks that have been paying for a decade or more that are getting the help.

Not all of the student debt crowd has moved on. In fact, I bet most of it hasn't.

I'd love to see some policy change, but until we get this heinous SCOTUS under some kind of reinback, it ain't gonna happen. I'm glad POTUS is doing this. Then again, I just had my loans forgiven yesterday and am extremely grateful.

[maxsolomon]

28. As I said, I'm hoping it translates into additional votes. I have doubts though.

Congrats on clearing your loans; I know my daughter was extremely happy when hers were forgiven last year. As was I when I sent that final check.

Can I ask why your father was paying off your brother's loan and not your brother?

[AllyCat]

30. Long story.

He was the favorite child. (My half-brother). His mom wanted everything for him so they took out a parent plus loan to pay for his schooling after declining to pay for any other kid in the house. She didn’t even want my brother to know they had taken it out as appearances were all to her.

In the divorce, she made my dad take the debt. She remarried a wealthy man and my dad died penniless. Not my battle. I felt really bad for him. My brother could EASILY have paid the loan had he known it existed.

[maxsolomon]

31. wow, that's not a good story.

my sympathies, that must have been tough.

[AllyCat]

32. Narcissistic personality disorder comes with its nastiness. C

I just had to walk away to remain sane.

But, I’m glad my loans are gone.