President Joe Biden campaigned on canceling $10,000 worth of student loan debt for most borrowers, but just a fraction of Americans with college debt have qualified for debt relief so far. While widespread cancellation may still be out of reach, thousands of student loan borrowers who were misled about the value of their education have had their student loans forgiven since Biden took office.
The U.S. Department of Education has canceled a total of over $1.5 billion worth of student loan debt for nearly 92,000 borrowers under the Biden administration as of July 2021. Keep reading to see who qualifies for college debt forgiveness and to see what you can do with your loans if you don't qualify, including student loan refinancing.
If you decide to refinance your college debt, visit Credible to compare rates across multiple lenders without impacting your credit score.
Who qualifies for student loan forgiveness under Biden?
Defrauded student loan borrowers have had billions of dollars worth of college debt fully discharged under the borrower defense program, which allows former students to apply if they believe their school engaged in misconduct.
Biden's administration has erased the college debt of select borrowers who attended the following institutions:
- American Career Institute
- The Court Reporting Institute
- Corinthian Colleges
- ITT Technical Institute
- Marinello Schools of Beauty
- Westwood College
The Department found that the institutions listed above misrepresented their education programs, whether by falsifying the value of the degree, the time it would take to complete the program or the post-graduation earning potential.
U.S. Secretary of Education Miguel Cardona said in a statement that the Department is "standing up for students whose colleges took advantage of them," signaling that the Biden administration will continue analyzing borrower defense claims going forward.
What to do if you don't qualify for student loan cancellation
While nearly 92,000 borrowers have qualified for student loan forgiveness under the Biden administration, about 44.7 million Americans have federal and/or private student loan debt, according to Student Loan Hero. The vast majority of borrowers still owe college debt, and it's still uncertain as to whether Biden will enact more widespread forgiveness measures.
With federal student loan payments set to resume this October, millions of borrowers need to prepare their finances so they don't default on their loans. But don't just wait for a discharge of your federal student loan debt. If your student loans haven't been canceled, you might consider an alternative student loan repayment program:
- Enroll in an income-driven repayment plan (IDR). Federal student loan borrowers may be able to temporarily reduce their payments to as low as $0, depending on income.
- Apply for federal student loan forbearance. You may qualify for an extended payment pause (deferment) of up to 36 months if you're unemployed or you're experiencing financial hardship.
- Refinance your student loans. Private student loan refinance rates are hovering near historic lows, which means it may be possible to lower your interest rate and monthly payment.
It's not recommended that you refinance your federal student loans, since doing so makes you ineligible for federal protections like IDR and administrative forbearance. But if you have private loans, now is the perfect time to refinance your debt so you can save money on interest and even pay off debt faster.
You can compare student loan refinancing offers across multiple private lenders on Credible's online loan marketplace.
How to know if student loan refinancing is right for you
Student loan borrowers can save tens of thousands of dollars over the life of their loans by refinancing, but it's not right for everyone. You'll want to think twice before refinancing your federal loans, and you should only refinance if you can qualify for a lower rate than what you're currently paying.
Analyze your loan statement to see what kind of loans you have, and check your current interest rate. Then, get prequalified for student loan refinancing on Credible to see if you qualify for a lower rate under a new student loan servicer. You can also use a student loan refinance calculator to see how much money you could save with a new interest rate.
Reach out to a knowledgeable loan expert on Credible to see if this option is right for you.
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