These student loan borrowers don’t qualify for limited student loan forgiveness.
Here’s what you need to know.
The major announcement for $4.5 billion of student loan forgiveness sent shockwaves throughout the student loan community. After years of frustration and inexplicable denials, certain student loan borrowers would get a second shot at cancelling their student loans. President Joe Biden has now cancelled $11.5 billion of student loans since becoming president. This includes a major announcement this week that $2 billion of student loans will be cancelled within weeks. It’s important to understand who qualifies for this new student loan forgiveness and who won’t:
Who qualifies for this student loan forgiveness?
To qualify for this student loan forgiveness, you must be a student loan borrower with federal student loans who is pursuing public service loan forgiveness. This is a federal program that Congress created in 2007 that forgives all your federal student loans if you work full-time for a qualified public service or non-profit employer, make 120 student loan payments and meet other requirements. If you aren’t enrolled in public service loan forgiveness, it’s not too late to enroll. You can still get total student loan forgiveness for all your federal student loans. (Here’s who qualifies for student loan forgiveness right now).
Which student loans qualify?
After years of a 98% rejection rate, the Biden administration relaxed the rules for student loan forgiveness. There is now a limited waiver for student loan forgiveness that enables certain student loan borrowers to get “credit” for student loan forgiveness, even if previously they wouldn’t have qualified. (Here’s how to apply for limited student loan forgiveness). Previously, only Direct Loans qualified for this student loan forgiveness. Alternatively, a student loan borrower could consolidate their student loans into a Direct Consolidation Loan. However, any student loan payments made prior to student loan consolidation would be ineligible. Now, in addition to Direct Loans, both Perkins Loans and FFEL Loans qualify for student loan forgiveness. Plus, any prior student loan payments for Perkins Loans and FFEL student loans qualify too. To qualify for student loan forgiveness if you have Perkins or FFEL Loans, borrowers will need to consolidate student loans before October 31, 2022. (Does Biden owe you student loan forgiveness?)
Which student loan borrowers don’t qualify for student loan forgiveness?
The following student loan borrowers won’t qualify for this student loan forgiveness:
- student loan borrowers who aren’t enrolled in public service loan forgiveness;
- student loan borrowers hoping to get student loan forgiveness for private student loans; (Here’s how to get student loan forgiveness)
- student loan borrowers with FFEL or Perkins Loans who don’t consolidate their student loans;
- student loan borrowers who don’t complete a limited student loan forgiveness waiver by October 31, 2022;
- student loan borrowers who don’t meet the requirements of the Public Service Loan Forgiveness program.
(Student loan forgiveness has one major problem)
How do you get student loan forgiveness if you don’t work in public service?
There are other ways to get student loan forgiveness, even if you don’t work in public service.
What are other ways to get student loan forgiveness?
There are many ways to get student loan forgiveness during the Biden administration. Biden has cancelled student loans for public servants ($4.5 billion), for disabled borrowers ($5.8 billion) and borrowers misled by their college under the borrower defense to repayment rule ($1.5 billion). Another way to get student loan forgiveness for federal student loans is through an income-driven repayment plan.
With student loan relief ending on January 31, 2022, you’ll need to start planning now for the best student loan repayment strategy for you. Analyze all your options. Here are some popular ways to pay off student loans faster: