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President Biden’s plan to forgive up to $20,000 in student loan debt for 40 million Americans is stalled—ensnared in conservative legal challenges that could block debt relief for months, or even for good.
But the Department of Education has launched a separate program that could reduce the student loan burden for up to 3.6 million borrowers—and forgive the loans of more than 40,000 Americans.
This initiative was rolled out earlier this year to rectify lenders’ practice of steering borrowers away from programs that could eventually forgiven their student loan debt. It will affect far fewer borrowers than Biden’s student loan forgiveness program, but it could help some of those most in need of debt relief—including people who went into low-paying fields or public service work after college.
Here’s what to know about the student loan review that the Education Department is conducting, and how to know if you might qualify.
What is the new student loan review program?
The new program focuses on borrowers whose loans were put into forbearance. Forbearance pauses monthly student loan payments, but those loans still accrue interest, starkly increasing the amount borrowers owe.
An NPR investigation showed that nearly 5.5 million borrowers spent three years in forbearance even though alternatives like income-driven repayment (IDR)―which use borrowers’ monthly income and family size to dictate student loan payment plans―were available because loan servicers did not enroll or inform people about these other options. Most borrowers under IDR are eligible for forgiveness after 20 or 25 years of payments depending on the type of degree.
Another often-overlooked option for some new graduates is Public Service Loan Forgiveness (PSLF)―a program that forgives student…
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