Automatic student loan forgiveness could be a big win for borrowers seeking relief.
, and it appears this type of program has a lot of potential.
What this means is that the Secretary of Education may forgive student loans in the performance of duties already “vested in him” by Congress. So, if a program to forgive student loans already exists, Biden can simply execute the forgiveness as long as the requirements are met.Public Service Loan Forgiveness - the Department of Education already knows the loan type and repayment program, and the IRS already knows if employment qualifies. Just match the two up.
This plan would apply to anyone working in schools, for the government, or for other non-profit organizations. Borrowers would be automatically enrolled in the program with no need for annual certification or extra hoops to jump through. According to JoeBiden.com, up to five years of prior national or community service would also qualify. , which was originally introduced by the U.S. Senator Kirsten Gillibrand and U.S. Senator Tim Kaine as a way to fix the bureaucratic nightmare PSLF has become.
Also note that Biden's proposals include some changes to income-driven repayment plans, which also have their problems. Under his plan, borrowers who earn $25,000 or less per year would not have any payments due on their undergraduate student loans, and they would not accrue any interest. Everyone else would pay 5% of their discretionary income for amounts they earn over $25,000.
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