Student Loan Forgiveness May Be on the Way
The U.S. Department of Education announced that borrowers should check their email to see if they qualify for broad loan cancellation. The move is part of the Biden-Harris administration’s effort to circumvent a previous Supreme Court ruling against Biden’s original sweeping plan for student loan forgiveness. Now the proposed rule, which is still being finalized, aims to provide narrower, more targeted debt relief.
What does this news mean for you?
Borrowers who may qualify for this benefit should monitor official communications and be prepared to take any necessary steps to apply or confirm their eligibility.
In its email to borrowers, the department lists four categories of rights:
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Borrowers who owe more than when repayment began.
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Those who entered into repayment of their student loans no later than July 1, 2005 or, if they have student loans, no later than July 1, 2000.
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People who are already eligible for student loan forgiveness under one of the existing government programs but have not yet applied.
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Students of “low-finance” programs.
In general, when it comes to more targeted eligibility, there are three main programs: Public Service Loan Forgiveness (PSLF) , Savings for Valued Education (SAVE), and Income-Driven Repayment (IDR) plans . “Hopefully, millions of people will have their student loans forgiven through these programs,” says Shaan Patel, CEO of Prep Expert.
According to Patel, there are strong signs that more and more loans will be forgiven, and assistance will be expanded through such means as “interest waivers, automatic forgiveness , targeted assistance to those facing financial hardship” and more.
A final decision on debt relief is expected to be made sometime in October . For now, the Department of Education says those who want help don’t need to do anything. No application required.
So, as the student loan and college financing landscape continues to evolve, it is critical to stay informed about new programs and opportunities. This potential debt relief for millions of borrowers marks an encouraging shift in addressing the student loan crisis. However, it remains important for incoming students to take a proactive and comprehensive approach to funding their education.
How to Find the Best Way to Pay for College
For most college-bound students, the path to financing their education can be challenging. Scholarships and loans are often the only viable options, and the number of options can be overwhelming. Patel identifies two main pathways for future students: loans and merit-based aid.
When it comes to loans, Patel encourages borrowers to regularly visit Studentaid.gov to stay informed about any updates regarding loan eligibility, deadlines, or new programs available to you.
Another piece of advice from Patel is to negotiate a financial aid package, an option that “many students and parents don’t even know is available to them.” If your family’s financial situation has changed since you originally applied several months ago—for example, due to a job loss or medical expenses—then you should document those circumstances and send a formal appeal letter to your financial aid office. Patel emphasizes the importance of visiting the office in person or, if possible, speaking with the office by phone. Compared to impersonal communication via email, you will be better prepared to present your arguments and understand the time frame for receiving a response. And as with any negotiation, if you have a better offer from another school, raise it. The Financial Aid Office may match or approve this competing proposal.
When it comes to scholarships and other types of merit-based aid, Patel’s top advice is to go local. “When I was a senior in high school, I applied for 100 scholarships,” Patel shares. “I won 20, and 19 of those scholarships were local to my city and state.” This makes sense: with national scholarships, your competition is stiff. With niche local scholarships, you increase your chances tenfold. Do in-depth research about the scholarships available in your area. There may be a local business you’ve never heard of that has a program that provides money to pay your way to school.
Patel shares another underrated strategy for those struggling to afford college: Consider attending a junior community college for two years and then transferring to a traditional four-year institution. You can save a significant amount on tuition and fees, and “many community colleges have transfer agreements in place with four-year universities to ensure a smooth, cost-effective transition.” Patel knows many students who were able to transfer to top universities after the cost of a four-year education was cut in half.
Conclusion
By exploring all available options, including federal aid and niche local scholarships, students can make informed decisions that suit their educational goals and financial circumstances. Remember, the key is to start early and stay organized. Again, visit Studentaid.gov regularly to take advantage of the latest tools and information for debt relief.