In the past few months, there have been several announcements regarding limited student loan forgiveness opportunities for certain borrowers. Naturally, whenever student loan forgiveness is getting attention, there can be confusion about who qualifies. Here’s a roundup of the latest student loan forgiveness announcements and their requirements.
IDR Forgiveness
The U.S. Department of Education (ED) recently began significant changes to Income-Driven Repayment (IDR) plans designed to accelerate loan forgiveness for IDR borrowers. This initiative includes a one-time account adjustment that retrospectively applies certain repayment periods, including some deferments and forbearances, toward forgiveness eligibility (Source: studentaid.gov). With this adjustment, some borrowers will receive at least three years of credit toward loan forgiveness, with many having their loans forgiven automatically. Loans in repayment for over 20 or 25 years may qualify for immediate forgiveness.
Who qualifies: Borrowers on an IDR plan or who were on one in the past, or not on an IDR plan but are interested and have Direct or Federal Family Education Loan (FFEL) Program loans held by ED (Source: studentaid.gov).
Public Service Loan Forgiveness
In addition to IDR changes, ED announced $3.2 billion in Public Service Loan Forgiveness (PSLF), aiding 43,900 borrowers who qualified through the limited PSLF waiver and program improvements. That brings the total amount of forgiveness through PSLF to $56.7 billion for 793,400 borrowers since October 2021 (Source: ed.gov).
Who qualifies: Borrowers who made 120 qualifying payments while working for qualifying employers. (Source: studentaid.gov).
Fast-tracked Relief for Smaller Loans
In February, ED enacted a rule change that will provide faster forgiveness for certain borrowers under the Saving on a Valuable Education (SAVE) Plan. Borrowers who originally borrowed $12,000 or less qualify for forgiveness after as few as 10 years of monthly payments (Source: ed.gov).
Who qualifies: Borrowers on the SAVE Plan who originally borrowed $12,000 or less and have made at least 10 years of qualifying payments (Source: studentaid.gov). For every $1,000 over the $12,000 balance threshold, an additional year of payments is required. The maximum repayment period will still be capped at 20 years for those with only undergraduate loans and 25 years for those with graduate school loans.
While student loan forgiveness is helping a small fraction of borrowers, millions more are still struggling under the burden of student loans. Learn how Attigo can help you help your students and alums find repayment success.
