Roughly 20% of the 43 million Americans holding federal student loans are in default. Prior to the pandemic, these borrowers faced harsh consequences, including wage garnishment, Social Security benefits offset, and seizure of their federal tax refunds–including the Child Tax Credit and Earned Income Tax Credit.  Additionally, default damaged their credit scores, and limited their economic mobility. For many, getting out of default previously seemed overly complicated or had become impossible because they had already exhausted their limited options for removing their loans from default. H ..read more

In November 2022, the Department of Education published final rules that will change regulations governing a variety of federal student loan cancellation programs as well as how interest impacts student loan burdens. The Department made significant changes to the following areas: Closed School Discharges, which are available when the borrower was unable to complete their program because their school closed;   Borrower Defense to Repayment, which makes cancellation available when the borrower’s school engaged in misconduct during enrollment or when trying to convince them to borrow f ..read more

On August 24, 2022, President Biden announced that to provide Americans still recovering financially from the pandemic with breathing room when student loan payments resumed at the beginning of 2023, the federal government would cancel up to $20,000 in federal student loans for eligible borrowers beginning this fall. However, because of recent lawsuits attempting to block President Biden’s cancellation plan, cancellation is now on hold while the cases are being litigated. The Supreme Court will hear arguments on the cancellation plan in February, and should issue a decision by the end of June ..read more

Over 26 million Americans have either applied for student debt cancellation or received notice that they will be approved for cancellation if they do not opt out since the application opened in mid-October. That’s roughly 1 in every 10 American adults. If you are one of those 26 million people, by now you’ve probably heard the bad news that court orders on November 11 and 14 blocked President Biden’s plan to cancel up to $20,000 in student loan debt for low- and middle-income people. The Biden Administration is appealing, asking higher courts–including the Supreme Court–to lift the blocks so i ..read more

Good news:  The online application for the Biden Administration’s student debt cancellation is now officially open!  And the application is fast and easy–you don’t need to submit any documents or even log-in to your StudentAid.gov account.  It will probably take you 5 minutes or less to apply.  You can apply now on your cell phone or on a computer.  The application is available in both English and Spanish. That means you can apply today to have $10,000 to $20,000 in eligible federal student loan debt canceled.  Apply now at studentaid.gov/debtrelief/apply. APPL ..read more

On October 6, 2021, the Department of Education announced it would temporarily change the rules for PSLF so that more borrowers could obtain cancellation. The waiver will only last until October 31, 2022. Borrowers will need to take steps prior to October 31, 2022 in order to qualify for the waiver.   Typically, to have your loans canceled under the normal PSLF rules, you must: have Direct Loans, work full-time in a qualifying public service job, be in an income-driven repayment plan,  make 120 monthly payments (10 years).  Under the PSLF limited waiver, the following now ..read more

Over the last few months, the Department of Education has made a number of groundbreaking announcements that will provide debt relief to millions of people with student loans. In addition to the big announcement that most people with federal student loan debt can apply to have $10,000 to $20,000 of that debt cancelled, the Department has also announced it will fully cancel the debts borrowers took on to attend four large predatory schools– Marinello Schools of Beauty, Corinthian Colleges, ITT Tech, and Westwood College–without requiring those borrowers to apply. In addition, the Department has ..read more

On August 24 2022, President Biden announced that he would cancel $10,000 of federal student loan debt for all borrowers who make less than $125,000 (for individuals) or less than $250,000 (for married couples or heads of households) and $20,000 for borrowers who received a Pell grant when in college and fall under those income thresholds. This is incredible news for the 43 million people who are eligible for relief. The Department of Education estimates that 20 million borrowers may have their loans completely canceled.  But that’s not all: The Department announced that it is extending t ..read more

Public service workers (including most government and non-profit employees) are generally eligible for federal student loan cancellation after 10 years in repayment through the Public Service Loan Forgiveness Program, but millions have missed out because the program rules are too complex and borrowers haven’t received sufficient information about the program from the Department of Education or their loan servicers. Fortunately, the Department of Education has temporarily relaxed the rules of the program so that many more borrowers can benefit and can get their loans canceled sooner—or even now ..read more

On June 22, 2022, the Department of Education agreed to a proposed settlement agreement in the class action lawsuit Sweet v. Cardona. In that case, a group of federal student loan borrowers sued the Department of Education for ignoring their applications for student loan cancellation under the Department’s “borrower defense to repayment” rules. Those rules allow borrowers to have their federal loans canceled if their school engaged in material misrepresentations, omissions, or other forms of misconduct.  Who Is Impacted by This Proposed Settlement?  Federal student loan borrowers are ..read more