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Education Department to roll out another pathway to student loan debt relief in February

The Biden Administration is rolling out another pathway to debt relief for certain student loan borrowers next month.

The program targets people who took out smaller loan balances initially and have been paying their loans down for over a decade, unable to get out from under the debt. It’s a component of the SAVE Plan, a new income-driven repayment plan rolled out by the Biden administration last year.

Specifically, people will qualify if they took out less than $12,000 as their initial student loan balance and have been paying it down for 10 years. They also have to be enrolled in SAVE.

The shortened pathway to debt relief is largely intended to benefit people who went to community college or didn’t end up graduating from college but still incurred debt, officials said, which has historically been the group at highest risk for defaulting on their loans.

givesomefucks ,

Debt relief is available to people who took out more than $12,000, too. For every $1,000 more that borrowers take out, one year is added to their repayment plan — so people who took out $14,000 could see their debt wiped clear after paying for 12 years.

That just seems like a really low amount…

I’m curious how many people would actually get forgiveness thru this.

What is like to see is capped total interest. Like, no matter how long it takes to pay back you’d never owe more than 25/50/75/whatever % of the original loan amount.

Borrow 10k and once you’ve paid back 15k, there’s just no more interest.

I pulled up a calculator, for 12k to take a decade, payments would be $110 and you’d end up paying about 150% of your loan amount.

Is this just for people who failed out after freshman year?

It feels like something that won’t help hardly anyone, but now Biden can claim he did something before the election.

If people don’t point out how little this helps, we won’t get any more. We’re only getting this because of complaining in the first place

mipadaitu ,

Well, the first few times they tried debt relief they lost in court saying it was unfair… for some reason.

So they’re chipping away at the problem from different directions now. I’m sure there are people that this effort will help, then they can come at it again from another direction and help another group.

Ranvier ,

Exactly, this is just one of many changes that gave gone through. The SAVE plan itself which is new provides a lot of benefits. Pslf has become much easier and broader. Tons of changes have been made across the existing student loan and forgiveness programs. There’s also another major new regulation working it’s way through that should be ready sometime this year.

forbes.com/…/big-student-loan-forgiveness-details…

It’s not as broad as the original plan though. We also won’t know the exact details until the rule is finalized. Unfortunately the supreme court made clear they won’t allow the broad loan forgiveness Biden first tried unless congress passes another law (even though it seems multiple laws already clearly give Biden this power, but we don’t need to rehash all of that. Republicans are always gonna sue to stop any positive things done by democrats, and supreme court gonna supreme court).

givesomefucks ,

Started “chipping away” towards universal healthcare 80 years ago when moderate Dems said they had to research it a little more…

Almost a century, and they’re saying the same thing…

Excuse me for expecting the normal timeline and saying it’s likely not going to be fast enough

mosiacmango ,

The SAVE plan caps interest to 0% while you make payments.

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