As student loan forgiveness nears $160 billion, here's what to know about the relief programs

The Biden administration's reforms to the U.S. student loan system have led to the cancellation of nearly $160 billion in debt for about 4.6 million borrowers. Key programs contributing to this relief include income-driven repayment plans and the Public Service Loan Forgiveness program, which have been updated to fix past tracking errors and expand eligibility.

Income-driven plans now allow for retroactive credit for payments, benefiting nearly 1 million people with almost $50 billion in debt cancellation. Meanwhile, improvements to the Public Service Loan Forgiveness program have erased debts for 876,000 public servants, totaling over $62 billion. Additional relief efforts include the Borrower Defense and Total and Permanent Disability Discharge programs, aiding those misled by schools or who are severely disabled.

The one-time payment count adjustment is a significant initiative under the Biden administration aimed at rectifying past inaccuracies in the tracking and counting of qualifying payments for student loan forgiveness programs34. This adjustment is part of a broader effort to amend issues within the income-driven repayment (IDR) plans and the Public Service Loan Forgiveness (PSLF) program13.

Clarification of Payment Histories: Historically, many borrowers who were enrolled in IDR plans did not get their payments accurately counted towards loan forgiveness due to errors by loan servicers13. The one-time payment count adjustment addresses these errors by recalculating the number of qualifying payments a borrower has made4. This recalculation includes giving credit for certain periods that were previously not counted, such as times of deferment or forbearance.

Broadened Forgiveness Eligibility: This adjustment is crucial as it potentially shortens the repayment period required for forgiveness under IDR plans and PSLF, by increasing the number of payments that count toward forgiveness13. For example, borrowers who have been making payments under IDR plans or who have been employed in qualifying public service jobs and making consistent payments may find that they are closer to meeting the forgiveness threshold or may already qualify for forgiveness due to the adjustment134.

Simplified Application Process: Importantly, this adjustment is applied automatically to the accounts of eligible borrowers, meaning that most individuals do not need to take any action to benefit from these changes1. This automatic application removes the burden from borrowers to prove their eligibility and ensures that more individuals will receive the forgiveness they are entitled to without additional bureaucratic hurdles13.

In summary, the one-time payment count adjustment is a key part of the Biden administration’s broader student loan forgiveness efforts, designed to correct past administrative failures and help more borrowers move closer to or achieve full loan forgiveness under established federal programs135.