The Public Service Loan Forgiveness program (PSLF) is temporarily suspended until July as the Biden administration makes improvements. During this time, borrowers will not be able to see their payment counts on the MOHELA website, and applications for loan forgiveness will not be processed. However, borrowers can still make payments, and those payments will count towards loan forgiveness once the transition is complete. Borrowers can request a forbearance if they qualify for debt cancellation during the transition.
Borrowers awaiting student loan forgiveness have until April 30th to request loan consolidation, which merges federal loans into one. This could accelerate forgiveness, as you'll receive credit for all payments since your first loan, regardless of its disbursement date. However, remember that consolidation may reset the forgiveness timeline, so consult an expert before proceeding.
After the Supreme Court blocked President Biden's initial student loan forgiveness plan, his administration has revised it to avoid legal challenges. The new plan focuses on specific groups of borrowers, such as those who have made payments for many years or attended low-quality schools. The government is also using a different law, the Higher Education Act, which gives the Education Secretary authority to forgive certain student loans. By targeting specific borrowers and using a different legal basis, the administration hopes this plan will withstand court scrutiny.
The Biden administration has released the proposed rules for its revised student loan forgiveness plan. It could reduce or eliminate debt for certain borrowers, including those eligible for existing cancellation programs, in long-term repayment, at questionable schools, or in financial hardship. Borrowers may also get up to $20,000 of unpaid interest forgiven. The plan is still subject to public comment and will likely be finalized and implemented in the fall.
Inflation has persisted at 3.5% despite the Federal Reserve's target of 2%, leaving markets on edge. While the economy remains strong, the Fed prioritizes inflation control over interest rate cuts, posing a dilemma. Experts discuss the possibility of the Fed's policy being too loose, while others advise maintaining it due to inflation and financial risks. The ongoing inflation has resulted in falling real incomes, becoming a political challenge for the Biden administration as it affects consumers and households.
The Biden administration has forgiven $7.4 billion in student debt for 277,000 borrowers. This is possible through improved oversight of income-driven repayment plans and the Public Service Loan Forgiveness program. Over 4.3 million people have had their federal education loans cleared, totaling $153 billion in aid, since Biden took office.
