From Time:

Federal student loan borrowers are facing a whirlwind of confusion with new program updates for loan forgiveness. President Biden’s administration announced waves of loan forgiveness, including $5 billion for borrowers in the PSLF and IDR plans. However, the rollout has been marred by complex qualifications and mixed messaging, leaving many borrowers frustrated and confused.

In addition to the recent forgiveness announcements, the Biden administration is executing a one-time payment count adjustment, recalculating payment histories for borrowers under the IDR and PSLF plans. This has resulted in more than 1.7 million borrowers having their loans forgiven so far, but some are frustrated by the wait for the adjustments to be processed on their accounts.

Biden’s SAVE program, which was initially planned to begin in July, will now start forgiving remaining balances as early as February. Borrowers who took out up to $12,000 in federal loans can have their balance canceled after 10 years of qualifying payments, with repayment timelines extending for larger amounts. Enrolling in SAVE sets monthly payments to 10% of disposable income, with plans to decrease it to 5% in July.

The Education Department has also been automatically canceling debt for vulnerable borrowers, such as those who are totally and permanently disabled or were defrauded by their schools. This has resulted in over 500,000 disabled borrowers having nearly $12 billion forgiven and 1.3 million defrauded borrowers having about $23 billion discharged.

Following the Supreme Court ruling that Biden didn’t have authority to broadly cancel student loan debt, he’s now undergoing a formal rulemaking process for a new forgiveness plan. Public hearings finished in December, but the details haven’t been finalized. Experts expect this plan to be more tailored than the original proposal of canceling between $10,000 and $20,000 of debt per borrower.

In the meantime, the kinks are still being worked out for the federal student loan programs, but the recent expansions should make it much easier for borrowers to navigate once fully implemented. Although it’s extra confusing right now, experts believe it will be worth it in the long run.



Read more: Student Loan Forgiveness: January 2024 Updates to Know