Student Loan Relief Update – Borrowers may be preparing for the worst case situation because the future of student loan forgiveness is still uncertain. That would entail the start of student loan payments at the very least by the end of August.
According to President Joe Biden, the Department of Education will forgive millions of people’s tens of thousands of dollars in federal student loan debt. (Photo via Getty Images)
Another strategy, though, might be able to assist certain debtors in paying off their debt. For borrowers on income-driven repayment (IDR) plans, the Department of Education announced a one-time payment adjustment in 2022 that will credit specific months toward loan forgiveness.
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“Student loans were never intended to be a life sentence, but it’s felt that way many borrowers locked out of debt relief they’re entitled for,” stated Miguel Cardona, Secretary of US Department of Education, in a previously published press statement.
Student Loan Relief Update – Borrowers may be preparing for the worst case situation because the future of student loan forgiveness is still uncertain. That would entail the start of student loan payments at the very least by the end of August.(Photo by Getty Images/iStockphoto)
The department noted that some loan servicers had put some borrowers into forbearance when, under an IDR, their monthly payment might have been $0. When the loans were in forbearance, these borrowers did not make any progress toward IDR forgiveness (or public service loan cancellation).
Protesters demonstrate in front of the United States in favor of the Biden administration’s promise to reduce student loan debt. On February 28, 2023, in Washington, DC, the Supreme Court. (Photo via Getty Images)
Yet, after the government fixed this, some borrowers might have finished the summer with no outstanding debt from their student loans. Regardless of the repayment plan, all months in which borrowers made payments will count toward IDR, according to a news release from the Department of Education.
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For the majority of IDR schemes, after 20 years of payments, borrowers are forgiven.
If this describes you, get in touch with your student loan servicer to learn your status following this one-time payment modification. You might be one step closer to being debt-free, whether or not the Supreme Court permits Biden’s plan to erase student loans to move forward.
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