Biden’s Automatic Student Loan Forgiveness Initiative Provides Relief — And Uncertainty


Since January, the Biden administration has announced that it would be cancelling billions of dollars in student loan debt by using executive action to expand relief under existing federal student loan forgiveness programs. This initiative has covered multiple student loan relief programs:

These student loan forgiveness initiatives are expected to provide nearly $10 billion in relief to hundreds of thousands of borrowers. The relief has two key features: it expands relief under existing student loan forgiveness programs to better “target” existing benefits, and the relief will be provided automatically.

The automated nature of the Biden administration’s student loan relief should, in theory, streamline loan forgiveness for many borrowers by cutting out administrative red tape that would normally be associated with processing applications. And in many ways, it’s working. “I am happy to be able to have this debt cleared and move forward with my life, and hopefully be able to purchase a home once I am financially stable again,” said one borrower who got her loans forgiven earlier this month through Biden’s expansion of Borrower Defense relief.

But the automated nature of the Biden administration’s initiatives is also causing uncertainty. The Department of Education has provided few details about its process for determining eligibility, or a timeline for when borrowers can expect to see the student loan forgiveness that they may be entitled to. The Department has indicated that it will utilize data-sharing tools between various federal agencies such as the Social Security Administration for automated TPD discharges, and the Department of Defense for retroactive interest waivers for military service members who served in hostile pay areas. But the Department has provided few additional details.

The results have been mixed. Many student loan borrowers waited at least six months to see their loan balances wiped out following the Department’s March announcement that it would be expanding relief for certain approved Borrower Defense claims. And the Department has not made a formal announcement that it has started processing the expanded relief announced for disabled borrowers, former ITT Tech students, or military service members. Without clear guidance or a timeline, uncertainty will likely persist for borrowers — which may be particularly concerning given that most federal student loans will be resuming repayment by February, after a nearly two-year payment pause.

In the meantime, borrower advocates are pushing the Biden administration to continue to expand its student loan forgiveness initiatives. Most recently, advocates have been focused on the Public Service Loan Forgiveness (PSLF) program, urging administration officials to relax PSLF’s opaque eligibility requirements and allow all student loan borrowers with 10 or more years of public service employment to have their federal student loans eliminated. So far, the administration has not announced any new initiatives.

Further Reading

Biden Urged To Fix Public Service Loan Forgiveness By Automatically Wiping Out The Debt Of Public Servants

These Student Loans Are Excluded From Biden’s Loan Forgiveness And Relief Programs — Here’s Why

Student Loan Borrowers: Expect These 4 Things By January

Biden Administration Cancels $1 Billion In Student Loans But Bungles The Rollout, Concerning Advocates

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