For three years, borrowers have had a much needed reprieve from being tied to monthly student loan payments following a nationwide pause enacted during the height of the pandemic in 2020. The US Department of Education announced that payments may resume as soon as June 30 2023 if President Biden doesn’t decide to extend the pause a ninth time.
As previously reported by ESSENCE, right now, the national total student loan debt (including federal and private loans) sits at $1.75 trillion. The average borrower took out $28,950.What’s more, the average student loan payment is $460 per month, and it usually takes the average borrower about 20 years to pay off their debts.
Fortunately, there are some programs out there that can help if the pause does indeed end. Here are a few.
The Sweet v. Cardona Settlement
In August 2022, a federal approval for a landmark settlement agreement between President Biden’s Education Department and a class of student loan borrowers was granted, offering a resolution to stalled student loan forgiveness applications for those who have made claims of being defrauded by colleges they attended.
Those who apply can a piece of the $6 billion discharge decision the federal court approved earlier this year. More information can be found here.
IDR Account Adjustment
The IDR Account Adjustment program provides a one-time “adjustment” of credit for borrowers.
“Any borrowers with loans that have accumulated eligible time in repayment of at least 20 or 25 years will see automatic forgiveness, even if they are not currently on an IDR plan,” the Education Department’s site says.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF), some federal loan borrowers are eligible to have their loans forgiven after 120 monthly loan payments. Those who work full-time work at a public service or government agencies can qualify for the PSLF program.
The PSLF Help Tool can help borrowers navigate the program’s qualifications.