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Joe Biden Is About to Discharge Students Loans for 800,000 People

By Dustin Rowles | Politics | July 14, 2023 |

By Dustin Rowles | Politics | July 14, 2023 |


GettyImages-1246877500.jpg

The Supreme Court may have blocked Joe Biden’s loan forgiveness plan, but for 800,000 people who have been paying their loans for over 20 years, the administration has rewarded the equivalent of winning lottery ticket for many of us. Those who have been paying back federal loans for 240-300 months (20-25 years), will reportedly have their loans discharged. Fully.

From what I understand of the press release and the email, student loan borrowers are supposed to have their loans forgiven after paying for 20-25 years under the income-driven model. However, because of nefarious “practices by loan servicers that put borrowers into forbearance in violation of Department rules,” a number of borrowers who should have qualified had not. Moreover, it appears as though the Department of Education is going to count all months a borrower was in repayment toward the qualifying 240-300 months regardless of whether the person made partial or late payments, or was in forbearance, or had deferred due to economic hardship.

The easiest way to determine if one qualifies for the discharge, however, is probably to check your email. If you received an email from the U.S. Department of Education saying that “you’re eligible to have your student loan(s) forgiven!” then you apparently qualify. “Discharges will begin 30 days after emails are sent.”

If you have not received an email, do not yet despair. The Department of Education will continue to update payment counts for borrowers every 2 months for the next year. If you reach that 20-25 year threshold within that time, your loans will be discharged. Moreover, other borrowers will be able to qualify 20 years after they began making loan payments regardless of how many months one could not pay for various reasons.

Will the Republicans try and stop this? Maybe. Can they? I don’t know. But clearly, this doesn’t fall under the same category of borrower the GOP had complained about before — the borrower who received $10,000 in (go f**k yourself) “free money.” The discharge will go to borrowers who have paid far more than the amount of their loan over the last two decades. For instance, I left school 22 years ago with $75,000 in loans. I have been paying $550 a month for 22 years, give or take a brief forbearance. I’ve paid around $130,000 toward my loans during that time. My principal now is $65,000. In other words, I’ve paid $130,000 but have only seen my principal reduced by $10,000 in 22 years.

This program is designed for borrowers like me who would otherwise have to make monthly payments until the day we dropped dead regardless of how much money we have actually paid toward our student loans. Huzzah!