student loan forgiveness

By | April 10, 2023

Student loan forgiveness refers to the cancellation or discharge of some or all of the outstanding balance on federal or private student loans. This can occur through a variety of programs and policies, including:

  1. Public Service Loan Forgiveness (PSLF): This program forgives the remaining balance on Direct Loans (a type of federal student loan) after the borrower has made 120 qualifying payments while working full-time for a qualifying employer, such as a government agency or non-profit organization.
  2. Income-driven repayment plans: These plans set the borrower’s monthly loan payments at a percentage of their income and forgive any remaining balance after a certain number of years of payments (usually 20 or 25 years).
  3. Borrower defense to repayment: This program allows borrowers to apply for loan forgiveness if they were defrauded by their school or if their school violated certain state laws.
  4. Closed school discharge: This program forgives the remaining balance on federal student loans if the borrower’s school closes while they are enrolled or shortly after they withdraw.

There have been ongoing discussions and proposals to expand student loan forgiveness programs, particularly in response to the COVID-19 pandemic and its economic impact on borrowers. However, the specific details and likelihood of such proposals becoming law remain uncertain.

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