Updated April 8, 2021

President Joe Biden has made it clear that he wants to alleviate financial burdens for student loan borrowers. This article provides information on the state of his student loan actions and proposals and explains who would qualify for student loan cancellation and/or forgiveness if his proposals become law. 

Extending student loan payment relief

On Inauguration Day, Biden extended the federal student loan payment relief until Sept. 30. This means that borrowers don’t have to make any federal student loan payments until that date. Additionally, no new interest will accrue on federal student loans, and no federal student loans in default will be collected.

The relief was granted in March 2020 and extended first by former President Trump and then by former U.S. Education Secretary Betsy DeVos. 

Until Biden’s intervention, the relief had been set to expire on Jan. 31. 

On March 30, Biden’s Education Secretary Miguel Cardona expanded the student loan payment pause to include 1.14 million borrowers with private student loans.

It is important for student loan borrowers to know that they don’t have to stop paying their loans. If borrowers wish to continue chipping away at their principal balances, they have that option. 

Who qualifies for student loan cancellation?

Since Biden took office, Cardona has canceled about $1 billion in student loan debt for approximately 72,000 people defrauded by for-profit colleges and universities and more than $1.3 billion in student loan debt for more than 41,000 borrowers with disabilities.

But on the campaign trail, Biden called for bigger actions.

In Biden’s Emergency Action Plan To Save The Economy, which is the COVID-19 relief plan that he campaigned on, he stated that he would ask Congress to immediately cancel $10,000 in student loan debt for all borrowers. 

However, Biden didn’t include student loan cancellation in his $1.9 trillion stimulus package. While canceling student loans appears to be something he is still interested in, it is unclear when and to what extent it will become a reality. 

On the campaign trail, Biden also proposed canceling student loan debt for all public college graduates earning less than $125,000 per year, for all graduates of private HBCUs and MSIs, and for all borrowers earning less than $25,000 per year. 

Some Senate Democrats, including Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.), have suggested increasing individual loan cancellation to $50,000 for all federal loan borrowers.

Who would qualify for federal student loan forgiveness?

Biden wants to create a new, simple program for borrowers who dedicate their post-college careers to public service. 

His proposed plan would forgive up to $50,000 of undergraduate or graduate student loan debt for eligible public service workers by relieving them of $10,000 per year for up to five years of national or community service. 

Biden does not plan to replace the current Public Service Loan Forgiveness (PSLF) program, which is available to public school teachers, government workers, and other nonprofit employees. Instead, he wants to “fix” the existing program, which has denied 99 percent of applicants, by making it more accessible. 

Update the income-driven repayment plan

Biden has expressed interest in updating the income-driven repayment plan for undergraduate federal student loans. 

Under Biden’s proposed plan, those making under $25,000 a year would not have any monthly payments on their loans, and their loans won’t accrue interest. Those making over $25,000 would pay 5 percent of their discretionary income towards their loans. For comparison, borrowers who are currently on the income-driven repayment plan are asked to pay at least 10 percent of their discretionary income. 

Additionally, under Biden’s plan, borrowers would have all of their loans forgiven after 20 years of eligible payments. 

All new and current borrowers would be automatically enrolled in Biden’s new income-driven repayment plan, but they will have the opportunity to opt out if they wish. 

We will update this article as new information becomes available.