Biden Student Loan Forgiveness Has Cancelled This Much Debt, But Here’s How Much Is Left - Forbes

This is how much student loan debt President Joe Biden has cancelled — and how much student loan debt remains.

Here’s what you need to know.

Student Loans

Since becoming president in January, Biden has cancelled more student loan debt than any other president. This includes:

• $5.8 billion of student loans for student loan borrowers with a total and permanent disability;
• $1.3 billion in student loan cancellation for 41,000 student loan borrowers in March;
• more than $1.5 billion in student loans through the borrower defense to repayment process for nearly 92,000 student loan borrowers; and
• another $1.1 billion in student loans cancelled today through borrower defense to repayment.

In total, Biden has cancelled nearly $9.8 billion of student loans. (Here’s how to know if you qualify for $9.8 billion of student loan forgiveness). This student loan cancellation has been focused on two main areas: total and permanent disability and borrower defense to repayment. Total and permanent disability is federal student loan forgiveness for student loan borrowers who are disabled and are no longer able to earn income. Borrower defense to repayment is an Obama-era rule that grants federal student loan forgiveness to student loan borrowers who were misled by their college or university.

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Biden and Trump also helped cancel $110 billion of student loans

In addition to $8.7 billion of student loan cancellation, Congress, Biden and President Donald Trump also cancelled an additional $110 billion of student loan debt. In March 2020, Congress passed the Cares Act — the $2.2 trillion stimulus package — which provided substantial student loan relief to federal student loan borrowers. This includes temporary student loan forbearance and a 0% interest rate on federal student loans. As a result, the U.S. Department of Education estimates that student loan borrowers have received $5 billion of savings each month. The student loan relief from the Cares Act expired on September 30, 2020. Trump extended that student loan relief through December 31, 2020 and then extended it again through January 31, 2021. Biden then extended student loan relief through September 30, 2021 and then granted a final extension through January 31, 2022. So, for the one year extension of student loan relief, at $5 billion per month, Biden will have cancelled another $60 billion of student loans.

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Student loan forgiveness: latest student loan debt statistics

In aggregate, including the student loan relief from the Cares Act, Biden has cancelled approximately $69.8 billion of student loans since becoming president. How does this compare to total student loan debt? The latest student loan debt statistics show that there are 45 million student loan borrowers who collectively owe $1.7 trillion of student loans. More than 90% of these student loans are federal student loans. Biden’s student loan forgiveness has focused exclusively on federal student loan forgiveness, since it’s challenging for the federal government to cancel private debt. On a percentage basis, the amount of student loan forgiveness to date is relatively small. For example, $9.8 billion of student loan cancellation represents approximately 0.6% of all outstanding student loan debt. This represents outright student loan cancellation. Based on $69.8 billion of student loan cancellation, this constitutes approximately 4% of student loan debt. This includes no interest accrual, but it also includes student loan cancellation because for purposes of student loan forgiveness through an income-driven repayment plan or public service loan forgiveness, these non-payments during Covid-19 student loan relief “count” as qualified payments.

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Will your student loans get cancelled?

Student loan cancellation sends three messages. While on a relative basis Biden’s student loan forgiveness may feel like a small amount, it depends how you view student loan cancellation. Biden has cancelled more student loans than any other president. There has been unprecedented student loan relief from Congress, Biden and Trump totalling billions of dollars that will last more than 22 months. Will everyone’s student loan debt get cancelled? Student loan cancellation may help more borrowers, but that doesn’t mean Biden will cancel everyone’s student loans. Even student loan forgiveness from Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) calls for limited student loan forgiveness only for federal student loan borrowers who earn up to $125,000 per year. What’s next for student loan cancellation? Biden has repeatedly said he doesn’t believe he has unilateral authority to enact wide-scale student loan cancellation. The next step for student loan forgiveness isn’t only about Biden’s legal ability to cancel student loans. Biden will continue to cancel more student loans through targeted student loan cancellation and will work with Congress to make the path to student loan forgiveness easier for millions of Americans. Student loan cancellation has become a focus on Capitol Hill, but not necessarily for outright student loan forgiveness. This includes simplifying income-driven repayment plans and fixing the Public Service Loan Forgiveness program. However, it doesn’t appear that wide-scale student loan cancellation that Warren, Schumer and others have called for will come to fruition.

Will your student loans get cancelled? There are many ways to get student loan forgiveness, whether it happens through Biden student loan forgiveness or existing federal student loan cancellation. Immediate student loan cancellation likely won’t be available to all pr even most student loan borrowers. If you have student loans, here are some popular options to save money:

• Student loan refinancing (get a lower interest rate + lower monthly payment)
• Income-driven repayment plans (get a lower monthly payment)
• Public service loan forgiveness (get student loan forgiveness)

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Student Loans: Related Reading

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Biden Student Loan Forgiveness Has Cancelled This Much Debt, But Here’s How Much Is Left - Forbes
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