Student Loan Trend Watch: Breaking Down the Latest Relief

The Biden administration announced more relief for certain borrowers, and the Department of Education extended a deadline to consolidate existing loans. Here are the latest developments in the world of student debt.

More Relief Measures

A group of more than 160,000 borrowers of federal student loans have had their loans forgiven through existing programs offered by the Department of Education (DOE), per an announcement earlier this week. When totaled, these discharged loans add up to $7.7 billion in relief for certain qualifying individuals paying off their federal student loans. It also brings the overall loan forgiveness approved by President Joe Biden’s administration to $167 billion for some 4.7 million borrowers since 2021. As a reminder, federal student loan forgiveness programs only apply to certain federal loans, and not to private student loans.

Borrowers who meet the following criteria may be eligible for relief and will be notified via email:

•   Those receiving Public Service Loan Forgiveness (PSLF)

•   Those who signed up for the Saving on a Valuable Education (SAVE) Plan and who are eligible for its shortened time-to-forgiveness benefit

•   Those receiving forgiveness on income-driven repayment (IDR) as a result of fixes made by the DOE

The DOE also said that as of mid-May, 8 million borrowers have received some federal student loan relief through enrolling in the SAVE Plan , which was created last summer. SAVE allows borrowers to apply for a lower monthly payment amount on your federal student loan, which may be adjusted based on your income and your family size.

DOE Extends Deadline to Consolidate Loans

The DOE also extended the deadline to consolidate student loans from April 30 to June 30 to give borrowers more time to apply for the benefit. Consolidating multiple federal student loans into one Direct Loan, may qualify borrowers for more debt relief through existing forgiveness programs.

This consolidation will support the government’s effort to analyze people’s payment counts and make adjustments. This way borrowers will get proper credit for progress made toward income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF). This may also result in a lower monthly payment amount, or greater access to various federal forgiveness programs. The DOE expects the payment count adjustment will be completed by September 1, 2024.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS24052302