What to do if you don't qualify for $9.5B worth of student loan forgiveness under Biden in 2021

See if you qualify for student loan repayment assistance like IDR plans, permanent disability discharges and refinancing. (iStock)

Since President Joe Biden took office in January, the Department of Education has discharged approximately $9.5 billion worth of student loan debt for more than 563,000 borrowers. The measures apply to those who qualified for a closed school discharge, a total and permanent disability (TPD) discharge and the borrower defense to repayment program.

But with 45 million Americans owing over $1.7 trillion worth of student loan debt, the vast majority of borrowers are still waiting to see if they will have a portion of their college debt forgiven.

Biden campaigned on forgiving up to $10,000 worth of student loan debt per borrower but enacting that legislation as president has proven to be difficult. The president has said that he wants Congress to come together to forgive student loan debt rather than using executive action to do so.

Keep reading to learn more about student loan forgiveness under Biden's education department and what you can do if you don't qualify. Borrowers struggling to repay their student loans have options, such as enrolling in an income-driven repayment plan and lowering their monthly payments with student loan refinancing.

If you decide to refinance your student loan debt, be sure to compare student loan refinance rates across multiple lenders to ensure you're getting the best interest rate for your situation. You can see student loan refinancing offers tailored to you without impacting your credit score on Credible.

Will student loans be forgiven?

It's difficult to predict whether Biden will be able to make good on his promise to cancel a portion of federal student loan debt per borrower. He's facing pressure from progressive lawmakers like Sen. Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer to use his presidential authority to cancel up to $50,000 in student loan debt.

Schumer previously said all the president has to do is "flick his pen" to forgive federal student loans. But in contrast, House Speaker Nancy Pelosi has said that the president doesn't have the authority to cancel student debt, adding that student loan forgiveness "has to be an act of Congress."

Biden has questioned whether he can use an executive order to cancel student loan debt. In April, he asked Education Secretary Miguel Cardona to provide a memo about the president's authority to cancel student loans, Politico reported

The Higher Education Act of 1965 gives the education secretary the power to "enforce, pay, compromise, waive, or release any right" on federal student loan collection. However, it's unclear whether that includes widespread debt forgiveness measures like Biden proposed on the campaign trail.


How to reduce student loan debt if you don't qualify for forgiveness

For the millions of Americans who haven't qualified for college debt forgiveness, student loans can be a heavy financial burden. President Biden extended the federal student loan payment pause through January 2022, giving borrowers just months to plan for payments to restart amid new waves of the COVID-19 pandemic.

Thankfully, borrowers can take a few steps to lower their monthly student loan payments, reduce the amount of interest they owe, and even try to qualify for other forms of student debt forgiveness. Here are a few things you can do if you're searching for student loan repayment options.


Refinance to a lower interest rate

Student loan refinancing is when you take out a new student loan with better terms to repay your current debts. By refinancing to a lower interest rate, you may be able to lower your monthly payments, pay off your debt faster and even save money on interest over the life of the loan. Here are two popular repayment plans:

  • Refinancing to a longer loan term can help you lower your monthly payments. Creditworthy borrowers who refinanced to a longer-term student loan on Credible were able to reduce their monthly payments by more than $250 on average, all without increasing the cost of borrowing.
  • Refinancing to a shorter loan term can help you pay off your debt faster and save more money over time. Credible borrowers who refinanced to a shorter-term loan were able to pay off their student loans 41 months faster and save nearly $17,000 while doing so.

Plus, student loan refinance rates are near record lows, making it a good time to lock in a lower rate on your student loans. 

Federal student loan borrowers should consider this: While you may be able to secure a lower student loan rate, refinancing your federal loans into a private student loan will make you ineligible for federal protections like income-driven repayment plans and COVID-19 emergency forbearance. 

You can compare student loan refinance rates from real lenders in the table below. When you're ready to begin the refinancing process, visit Credible to get pre-qualified for student loan refinancing offers without hurting your credit score.

Apply to alternative student loan forgiveness programs

More than half a million borrowers have qualified for student loan forgiveness under Biden through programs like borrower defense, TPD discharges, and closed school discharges. But if you don't qualify for these student debt forgiveness programs, you have a few other options:

  • Public Service Loan Forgiveness (PSLF). Eligible civil servants like teachers, law enforcement, and public defenders may qualify to have the remainder of their federal student debt discharged after making 120 consecutive qualifying payments under the PSLF program.
  • Teacher Loan Forgiveness Program. If you teach in a low-income school or educational service agency for 5 consecutive academic years, you may be eligible for up to $17,500 worth of federal student loan forgiveness.
  • Borrower defense to repayment. Students who were misled by their school may be eligible for the borrower defense program, which can discharge some or all of your student loan debt. The Biden administration has canceled $1.5 billion worth of debt through the borrower defense program for students who attended the now-defunct ITT Technical Institute, as well as a few other schools.

It can be notoriously difficult to meet the requirements for federal loan discharges. For example, 98% of PSLF applications have been rejected since the program started. 


Enroll in an income-driven repayment plan or additional federal forbearance 

Federal student loan payments restart in February 2022, but a recent survey found that 40% of borrowers said that longer administrative forbearance is needed. 

If you won't be ready to resume federal student loan payments in a few months, you should enroll in an income-driven repayment plan on the Federal Student Aid (FSA) website. This limits your student loan payments to about 10-20% of your disposable income.

You can also apply for up to 36 months of additional federal student loan forbearance by filling out an unemployment deferment request or economic hardship request


Pay more than the minimum student loan payment

One simple way to reduce the amount you pay for your student loan debt — and to pay off your student loans faster — is to make more than the minimum payment required. This will save you money on interest over time, so you can meet your other financial obligations and goals.

See how much money you can save by making more than the minimum student loan payment using Credible's student loan calculator

Not sure how to handle your student loan debt? Get in touch with a knowledgeable loan officer at Credible who can answer all your questions about student loans and student loan refinancing. 


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