$1.2 billion worth of federal student loans were just forgiven
here's how to find out if you're eligible 🤑
10-minute slow read. There is a recording of this newsletter above for accessibility. Please let me know if you have any other access needs.
Hello, hotties!
I hope you’ve been well early in 2024. I’m sorry I haven’t posted on Substack in a while! The last eight weeks have been hectic and challenging, to say the least, but I’m happy to revive this newsletter with a quick update on student loan forgiveness.
This is a long read, but if you stick with me, you’ll learn who’s eligible for this round of forgiveness, plus what this means in the context of the 2024 presidential election and what’s happening in Palestine.
The Biden Administration forgives $1.2 billion worth of federal student loans
On Wednesday, February 21, the Department of Education announced that The Biden Administration will be automatically discharging $1.2 billion in loans for nearly 153,000 borrowers who are enrolled in the SAVE Plan.
To be eligible for forgiveness, borrowers have to meet the following requirements:
Enrolled in the SAVE Plan
Borrowed $12,000 or less for college
Have been making at least 10 years of payments
For every additional $1,000 over the $12,000 threshold, you need to be making 1 more year of payments to have your student loans forgiven. For example, if you borrowed $13,000, you need 11 years of payments to qualify for forgiveness. If you borrowed $14,000, you need 12 years of payments, and so on.
Under the SAVE Plan, federal student loans will be forgiven after 20 or 25 years of repayment, regardless of how much you borrowed. This new round of forgiveness targets borrowers with low balances who have been in repayment for years with no end in sight.
Eligible borrowers don’t need to do anything to receive forgiveness. If you’re eligible, you’ll receive an email from President Biden. The email reads, “I hope this relief gives you more breathing room.”
How to check your student loan balance and loan details
A 2023 survey by NerdWallet says 46% of people with federal student loans do not know their student loan balance. On top of that, 57% of borrowers do not know who their loan servicer is and 31% do not know their interest rate.
Your student loan servicer is the company that handles the billing and credit reporting of your federal student loans. Student loan servicers may change over the years without our consent or control. For example, in June 2023, just months before student loan payments started again, millions of borrowers were switched to a new student loan servicer.
On the other hand, your interest rate is a percentage of your loan charged by the lender as a fee for lending you money.
My dear hottie, I hate to break this to you, but if you don’t know your interest rate, then you don’t know how much it actually costs you to borrow that money. I know that student loans can trigger a freeze response in many people, but, in this instance, knowledge is power. Your balance, servicer, and interest rates are key components in making a debt payoff plan.
To find all of this information, go to studentaid.gov and log in using your FSA ID, a username and password combination you can use to log on to Department of Education systems. The site now includes opportunities to update the phone number and email address associated with your student loans. They’ll also give you a back-up code, so keep a pen and paper handy to write that down.
Important reminders for people who can’t afford to pay off student loans
We are still currently in an “on-ramp” grace period where missing your student loan payments will not negatively affect your credit or result in delinquency. The on-ramp period will continue until September 30, 2024.
The SAVE Plan is a new income-driven repayment plan that calculates your monthly payments based on your adjusted gross income (AGI), which can be found on line 11 of your Form 1040, aka your tax return.
Some people who signed up for the SAVE Plan aren’t yet seeing the monthly payment cuts they expected when they signed up. In July 2024, additional benefits of the SAVE Plan will go into effect, and your payments will be reduced even more. To calculate your monthly payments before and after July 2024, use the edcap SAVE IDR Plan Calculator.
The Debt Collective is the nation’s largest debtor’s union. Beyond advocating for the widespread cancellation of student loans since 2012, Debt Collective also offers support groups for disabled borrowers, educators, and borrowers over 50.
Having debt does not make you a bad person. Debt is inherently value neutral. Owing money simply means that, at one point, you needed money and somebody else had it. When you’re feeling down about your student loans, please remember that you’re not alone. <3
Borrower advocacy groups say there’s more work to be done to relieve the burden of student loans
While traditional media outlets say that Biden isn’t getting enough credit from voters, some borrower advocacy groups say there’s more work to be done.
The Student Borrower Protection Center wrote on its Instagram page, “President Biden started the critical work of providing much-needed student relief. Now his administration must finish the job.”
On Instagram, Debt Collective wrote, “Stop breadcrumbing us, [President Biden].” Typically used in the context of romantic relationships, breadcrumbing is a manipulative technique where one partner gives the other one small, insignificant bids for attention while avoiding making a significant commitment.
“$138 billion to student debt relief has changed the lives of millions of Americans, but when you measure that amount to the almost $2 trillion of federal student debt that still exists, it kinda feels like breadcrumbing,” said Debt Collective in its video.
What student loan forgiveness means for the upcoming presidential election
The personalized student loan forgiveness emails to 153,000 borrowers come at a time when Biden’s approval rating is lower than before. According to The Pew Research Center’s report published on January 25, 65% of Americans disapprove of the president’s job performance. In 2021, only 42% of Americans disapproved of Biden’s job performance.
The decline in Biden’s approval ratings may be due to his persistence in sending funds and weapons to Israel while they carry out an ongoing genocide of Palestinians in the Gaza Strip, earning him the nickname “Genocide Joe.”
In January, Department of Education official Tariq Habash, who helped overhaul the student loan system to address inequities in higher education, resigned from his position in solidarity with Palestine. Habash is the second White House official to resign from office due to Biden’s stance on Israel and Palestine.
While President Biden’s performance ratings hang in the balance, student loan forgiveness remains an opportunity to stay in voters’ good graces.