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A graduate wears tuition fees on his cap when Boston returns to university, as seen in May 2017. (Photo by Jessica Rinaldi â The Boston Globe / Getty Images)
Since taking office in January, President Joe Biden has canceled $ 9.5 billion in student loans through four rounds of cancellations targeting two main groups of borrowers: Americans with total and permanent disabilities and individuals having attended establishments that no longer exist. The forgiveness amount, however, represents less than 1% of all federal student loan debt, which totals $ 1.7 trillion among 43 million borrowers.
These cycles of forgiveness have made borrowers wonder if other cycles of forgiveness are underway. Some student loan experts think so.
“I think it’s very likely that the Biden administration will continue to take action regarding targeted loan cancellation,” Mark Kantrowitz, author of How to Appeal for More College Financial Aid, recount Fortune.
However, targeted forgiveness is very different from mass cancellation. Democratic lawmakers and student loan cancellation advocates have asked for up to $ 50,000 for cancellation per borrower, but Biden said he was “not prepared” to write off $ 10,000. This is in part because of a looming question over Biden’s power to massively write off student debt through executive order, which he and House Speaker Nancy Pelosi don’t believe he has. On the contrary, they argue that an act of Congress is necessary.
âIt’s hard to say, but at this point it seems more likely that we’ll continue to see targeted student loan forgiveness for certain groups of borrowers,â said Rebecca Safier, Certified Student Loan Advisor at Student Loan Hero. . Fortune. “It appears Biden was unwilling to engage in a massive student loan cancellation. “
So who can expect a next targeted student loan forgiveness?
More borrowers with defense loan release requests
So far, three of the four rounds of student loan cancellations announced this year have gone to borrowers who attended institutions that participated in deceptive or illegal practices. Students who fall into this category must submit a borrower’s defense loan discharge application through the federal student aid office.
Kantrowitz says the Biden administration will likely continue to defend borrowers against repayment rounds. Basically, we could see more borrowers who have frequented institutions that are no longer in existence and have their loans canceled.
As part of rounds one, two and four of this year’s student loan forgiveness, the Department of Education will provide full loan forgiveness to borrowers who have attended Corinthian Colleges, ITT Technical Institute, American Career Institute, the Court Reporting Institute, Westwood College or the Marinello Schools of Beauty. All of these schools were determined to have misled students. About 188,000 borrowers will benefit from these three rebate rounds.
âBorrowers deserve a simplified and fair path to relief when they have been harmed by the misconduct of their institution,â Education Secretary Miguel Cardona said in a March 18 statement announcing the first cycle of forgiveness.
Public service workers
Another group of borrowers who could benefit from a restart are civil service workers. These borrowers deserve to be at the top of the remission priority list, previously said Cody Hounanian, executive director of the Student Debt Crisis Center. Fortune, since they receive student loan relief under the Federal Student Aid Public Service Loan Forgiveness (PSLF).
The program forgoes the remaining balance of direct loans after making 120 eligible monthly payments for workers, including teachers, firefighters and social workers. But about 90% of people who applied for the program were turned down, according to Hounanian.
Kantrowitz and Safier agree that reform of the PSLF could be underway. However, reform may need to be implemented through regulatory changes, says Kantrowitz. Changing the PSLF’s regulations would be a “slow process,” he said, which would involve meetings of the education department’s committee and a period of public comment.
âI don’t think anyone knows what’s going to happen yet, but it looks like some sort of reform in student loan forgiveness has been a priority,â Safier said. âI hope we will continue to see some reforms move forward.
“We’ll have to wait and see.”
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