Student loans

Biden proposes extending limited student loan forgiveness waiver

President Joe Biden will extend the limited waiver for student loan forgiveness.

Here’s what you need to know — and what that means for your student loans.

Student loans

Biden’s education department announced major changes to student loan forgiveness this week. Specifically, Biden is helping millions of student borrowers get their student loans forgiven and forgiven more easily. This includes changes to:

Notably, Biden’s proposal effectively makes major parts of the waiver limited to student loan forgiveness. permanent. Let’s explore.


Student Loan Forgiveness: Limited Exemption

The limited student loan forgiveness waiver is a game-changer for student borrowers applying for student loan forgiveness. For example, student borrowers who have public service loan relief and income-driven repayment plans can qualify for the limited relief. The purpose of the limited waiver is to relax student loan forgiveness rules and allow borrowers to “count” student loan payments that were previously not eligible for student loan forgiveness. Here are some key benefits of Limited Forgiveness for Student Loan Forgiveness:

  • Student loan payments from FFELP loans and Perkins loans will count toward student loan forgiveness;
  • student loan payments before student loan consolidation count toward student loan forgiveness;
  • student loan payments made under the wrong student loan repayment plan count toward student loan forgiveness;
  • late or incorrect student loan payments count toward student loan forgiveness; and
  • student loan payments made during active military service—even if the borrower was enrolled in a student loan forbearance or temporary deferral—count toward student loan forgiveness.

Currently, student borrowers have until October 31, 2022 to take advantage of the limited student loan cancellation waiver. After that, the limited waiver was to expire.


Limited student loan forgiveness waiver could become permanent

Biden’s key changes to student loan forgiveness will incorporate several features of the limited waiver and make them permanent. For instance:

  • making it easier for student borrowers to qualify for student loan forgiveness;
  • “accounting” partial, lump sum, and late payments on student loans for student loan forgiveness; and
  • allow certain types of student loan deferral and student loan forbearance (such as those for military service, National Guard duty, and Peace Corps and AmeriCorps service) to count toward cancellation of the civil service loan.

However, the U.S. Department of Education notes that some of the limited waiver provisions will not become permanent due to “statutory restrictions.” For example, suppose you have FFELP student loans. In this case, you must apply for a public service loan forgiveness by October 31, 2022 to ensure that you can “count” past student loan payments as part of the limited student loan forgiveness waiver.


Student loans: next steps

If you’re excited about Biden extending the limited waiver for student loan forgiveness, then you have reason to cheer. This relaxation of student loan forgiveness rules will help you get student loan forgiveness faster. If you want to shape the future of student loan relief, the Department of Education is giving the public 30 days to comment on the proposed rules. After the public comment period, the Biden administration will finalize the rules by November 1, 2022 and implement the final rules on student loan forgiveness by July 1, 2023. Importantly, these rules are separate from any potential large-scale student loan cancellations and the end of the student loan payment pause on August 31, 2022. Make sure you are ready for the restart of student loan payments beginning September 1 . Here are some smart ways to pay off student loan debt faster:


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