Recent grads will likely be out of luck, as borrowers will have to take a deep dive into at least 20 years of their payment history to determine if their student loans will be forgiven as a result of Friday’s announcement.
Topline
President Joe Biden and the Department of Education announced $39 billion in student loan forgiveness Friday, a watered down version of his previous, more ambitious student loan forgiveness plan—but to find out if you qualify, you’ll need to look back at a repayment history stretching back at least two decades, keeping recent grads from immediate relief.Key Facts
Essentially, borrowers are already eligible for some forgiveness through a program that already exists after they’ve made at least 240 or 300 monthly payments—depending on what specific repayment plan they’re on and the loan they took out—but previously, months where payments were late, partial or deferred didn’t count towards that.
Friday’s announcement changes that, and monthly payments that previously didn’t count towards the forgiveness now will.
This applies to people on an income-driven repayment plan—which is a payment plan that is adjusted based on income and family size—or who were on one in the past, as well as people in the public service loan forgiveness program or people who have direct or federal family education loans held by the Department of Education.
