What Biden Was Able to Accomplish for Student Loan Borrowers | Global News Avenue

President Joe Biden is leaving the White House without fulfilling many of his promises to federal student loan borrowers, but it’s not for a lack of trying.

Before being elected, Biden promised borrowers cheaper student loan payments and easier forgiveness. During his four years in office, he directed the Department of Education to implement programs that closely adhered to his campaign promises, but many of those programs were blocked or suspended by legal challenges.

Despite the challenges, Biden successfully forgiven or forgiven the student loan debt of 5.3 million borrowers, totaling $188.8 billion.

What did Biden promise?

During the 2020 campaign, Biden laid out plans for student loan borrowers.

He said those making $25,000 or less will not need to repay federal student loans, which will not accrue interest. All other borrowers will only have to pay 5% of their discretionary income toward their loans, and all borrowers’ loans will be forgiven after 20 years, he said.

He also promised to change the tax code so that borrowers who receive income-based repayment plan relief do not have to pay taxes on the relief.

Additionally, Biden said he would simplify Public Service Loan Forgiveness (PSLF) program. The updated program would provide $10,000 in relief for each year a borrower works as a public worker for up to five years.

Biden delivers on some of his promises, but others are blocked in courts

Biden’s original student debt relief plan proposal would forgive up to $10,000 to $20,000 in student loan debt for low- and moderate-income borrowers. It would also create a new income-driven repayment plan that would cut repayments to 5% of a borrower’s discretionary income.

Supreme Court Proposal blocked in June 2023the Biden administration began working to achieve some of these goals through additional rulemaking processes.

Biden then introduced Save for a valuable education (SAVE) The plan in October 2023 would reduce monthly payments to 10% of discretionary income and provide relief after 20 years.

Last July, one of the provisions of the SAVE plan was Plan to reduce payments Only 5% of the borrower’s discretionary income. However, The regulations were blocked in court It took some twists and turns before it could be implemented. All SAVE program borrowers are put into patience until the end of the month until the lawsuit is resolved. Biden received nearly $5.5 billion in forgiveness through repayment plans before they were shut down.

One of the promises Biden made good on was to tweak the tax code to gain forgiveness. Under the American Rescue Plan Act, borrowers who received loan forgiveness between December 31, 2020 and January 1, 2026 will not have to pay federal taxes on this relief.

The Biden administration also Easing eligibility rules for PSLF programallowing more service members to receive loan forgiveness. Before Biden entered the White House, only 7,000 borrowers had received forgiveness through the program. The Education Department said nearly 1.1 million PSLF borrowers will receive $78.46 billion in relief by the time he leaves.

The government also provided more than $34 billion in forgiveness to more than 1.9 million borrowers involved in misconduct in schools and $18.7 billion in forgiveness to nearly 633,000 borrowers with total and permanent disabilities.

What’s next for the borrower?

As Biden leaves and a new administration takes office, many incoming officials are critical of SAVE and other student loan relief programs, Borrowers are worried about the future Income-driven repayment and forgiveness plans.

The SAVE program remains subject to ongoing litigation, currently pending before the Eighth Circuit Court of Appeals. If an appeals court rules the program is illegal, or the incoming administration chooses not to defend the program, the SAVE program could end.

In addition, a senior Republican congressman told Forbes in December that student loan forgiveness and repayment plan reforms may occur in early 2025, hindering more than just the SAVE program.

The Education Department and legal experts following the court cases say borrowers who have already received loan forgiveness cannot have their loans canceled by the courts or the new administration.