Borrowers with federal student loans from the FFEL program and federal Perkins loans had been excluded from the PSLF program for years. This has primarily benefited those enrolled in income-based repayment programs, as they are no longer required to report waived amounts as taxable income. Davidson & Co recently conducted a survey to gain insight into borrowers' opinions on student loan forgiveness and large-scale forgiveness. The Biden administration has yet to make a statement on widespread student loan forgiveness, despite pressure from progressive Democrats who have asked the president to issue an executive order that would eliminate the debt of millions of borrowers.
You may qualify for teacher and utility loan forgiveness (see below), but you cannot use the same years of service to be eligible for both programs. When payments resume, most federal student loan borrowers will resume their monthly payments with the same outstanding balance they had when the pandemic began. Under the limited exemption, a broader set of loan types and repayment plans will be eligible for PSLF, including previous FFEL or Perkins loan payments, late payments, and payments made on previously unqualified repayment plans. When asked by reporters about the possibility of President Biden extending the payment break again or enacting greater student loan forgiveness the day before, White House press secretary Jen Psaki said the president had not yet made a decision.
Student loan forgiveness may be a welcome possibility that offers some relief to student borrowers toward the end of their repayment period, but its future is uncertain. Tayne predicted in April that if Biden or Congress passed a proposal on student loan forgiveness, it would be more likely to target specific groups. Meanwhile, Kantrowitz advised borrowers not to take any hasty action in anticipation of loan forgiveness. And the federal student aid office plans to allow more loan states, such as deferrals and deferrals, to count toward income-driven forgiveness in the future.
The most recent update was in late October by Education Secretary Miguel Cardona, who said the Biden administration continues to examine broad-based loan forgiveness. Education Secretary Miguel Cardona also assured borrowers that the Department of Education would use the extension to improve accountability within servicing student loans and better prepare administrators to transition to regularly scheduled payments. Borrowers with high interest rates may want to start considering student loan refinancing options, especially as the Federal Reserve begins to increase its target federal funding rate.