New student loan debt cancellation measures will wipe out debt for millions of borrowers. Find more 2022 student loan forgiveness facts and figures in our report.
Data Summary
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In the same announcement, he extended the student loan payment pause through December 2022.
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As of June 2022, 60% of federal student loan borrowers were exempt from making payments.[1]
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As of January 2021, only 32 borrowers have ever received income-driven repayment student loan forgiveness after more than 20 years of repayment.[2]
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Thousands of public service professionals may be eligible for loan forgiveness through temporary federal relief actions.Footnote [3]
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The average amount forgiven through PSLF is about $64,000.Footnote [3]
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The federal student debt balance has risen to over $1.6 trillion,Footnote [5] with the typical borrower owing $20,000-$25,000 in loans.[6] It’s no wonder that many Americans want student loan debt canceled: In a 2020 survey by BestColleges, 40% said they supported federal student debt cancellation. And almost three-quarters (72%) of indebted students said they supported cancellation.
Even though student loan forgiveness programs have existed for years, program flaws have kept millions of eligible borrowers from actually receiving forgiveness. Recently, Biden announced some loan forgiveness measures for low- and middle-income borrowers.
This report covers the latest updates on student loan forgiveness, answers who would benefit from sweeping forgiveness, and shares the data from current student loan forgiveness programs.
Student Loan Forgiveness 2022 Updates
President Biden’s August 2022 announcement applies to individual borrowers making less than $125,000 a year and households making less than $250,000 a year.
Borrowers who received a Pell Grant qualify for up to $20,000 in student loan forgiveness. Other borrowers qualify for up to $10,000.
Prior to this announcement, the Department of Education (ED) had canceled close to $32 billion in student loan debt for 1.6 million borrowers.Footnote [4] That’s about 2% of the total federal student loan debt balance and 3.7% of all borrowers.Footnote [5]
Without available data on student loan debt by income level, it’s difficult to say how much total debt will be forgiven or how many borrowers will qualify. However, the ED estimates:[7]
- The measure will fully cancel loan debt for about 20 million borrowers.
- Roughly 27 million Pell Grant recipients will be eligible for up to $20,000 of debt cancellation.
- 90% of forgiveness dollars will go to borrowers making under $75,000 annually.
Additional Student Loan Forgiveness Updates
Political and advocacy groups have proposed guidance for student loan forgiveness in 2022.
- Borrower advocates are pushing for the PSLF waiver to extend past its October 31 deadline for at least another year.
- A bi-partisan proposal aims to streamline IDR enrollment, leading to faster forgiveness for borrowers who qualify.
- Republican lawmakers have proposed to end most forgiveness programs and limit graduate student borrowing. The act would, however, expand Pell Grant financial aid.
Economic Impact of Student Loan Forgiveness
Additional student loan forgiveness could bring relief to many who are struggling to repay student debt.
In a February 2022 survey of nearly 24,000 student loan borrowers:[8]
Student Loan Forgiveness Programs
The federal government runs the forgiveness programs listed below. These programs only apply to federal student loans. Private loans generally do not qualify for loan forgiveness.
Public Service Loan Forgiveness
The PSLF program grants federal loan forgiveness to borrowers who work full time in public service.
The program can be difficult to qualify for. Borrowers must make monthly payments for 10 years on a qualifying repayment plan.
Recent temporary changes to PSLF have allowed more borrowers to qualify for the program. These program adjustments include:
- Temporary Expanded PSLF (TEPSLF): This has allowed borrowers to count payments made on certain non-qualifying plans toward the 120 they need for forgiveness.[9]
- PSLF Limited Waiver: This waiver allows borrowers to count late payments and payments made on additional non-qualifying plans toward their eligibility.[10]
PSLF Statistics
Most PSLF forgiveness has occurred due to these recent temporary changes to the program.
As of June 2022:Footnote [3]
- Just 2.5% of borrowers who met employment eligibility qualified for PSLF under the original rules.
- About 150,000 additional borrowers have received loan discharges through the TEPSLF and limited waiver.
- The PSLF limited waiver reached close to 12 times the number of unique borrowers as the number of borrowers who qualified for traditional PSLF.
- This waiver forgave more than seven times more debt than the original PSLF.
- There are 1.3 million PSLF-eligible borrowers who have not received forgiveness. Their total debt is over $133 billion.
| PSLF Forgiveness Type | Number of Recipients | Total Amount Forgiven (Approximate) | Average Amount Forgiven Per Borrower |
|---|---|---|---|
| PSLF (Original) | 12,523 | $1.2 billion | $99,063 |
| TEPSLF | 6,498 | $285 million | $43,915 |
| PSLF Limited Waiver | 146,728 | $9 billion | $61,408 |
| All of the Above | 164,555 | $10.5 billion | $63,888 |
Source: Federal Student Aid
Source: National Association of Student Financial Aid Administrators
Teacher Loan Forgiveness
If a borrower teaches full-time for five consecutive years in a low-income school, they could be eligible for teacher loan forgiveness (TLF). Under the TLF program, math and special education teachers can receive up to $17,500 in loan forgiveness. Other teachers may qualify for up to $5,000. Borrowers cannot get credit toward the TLF and PSLF programs simultaneously.[11]
- In 2021, about 27,000 borrowers had more than $215 million forgiven through TLF.[12]
- Since 2009, $3.7 million has been forgiven among roughly 434,000 borrowers.Footnote [12]
Income-Driven Repayment Loan Forgiveness
The government offers four income-driven repayment (IDR) plans. IDR plans have lower payments than the standard planand last 20-25 years. The federal government is supposed to forgive any remaining balance at the end of the term.[13] However, very few IDR enrollees receive forgiveness.
- As of June 2021, the ED approved forgiveness for just 157 IDR loans, out of roughly 7,700 that could be eligible.[14]
- As of January 2021, only 32 IDR borrowers had ever received forgiveness after more than 20 years of repayment.Footnote [2]
- The IRS taxes borrowers who receive IDR loan cancellation on the amount forgiven, causing borrowers to face a sudden, unaffordable tax bill. The American Rescue Plan Act of 2021 paused this practice, but it’s scheduled to resume after 2025.[15]
- Currently, over 9 million borrowers are on an IDR plan.[16]
Borrower Defense
Borrower defense refers to the process where former students can seek loan forgiveness if their college misled them or participated in misconduct. For example, students can seek borrower defense if their school falsely promised student loan forgiveness.
- In June 2022, the ED approved the largest single student loan forgiveness amount ever — $5.8 billion of debt cancellation for students who attended Corinthian Colleges
- In August, it offered $3.9 billion in forgiveness to 208,000 ITT Technical Institute attendees.
- Together, the Corinthian Colleges and ITT Technical Institute settlements amount to roughly $9.7 billion in borrower defense forgiveness. That’s five times the $1.9 billion balance that had been forgiven through borrower defense up to that point.
- Additionally, the government agreed to cancel more than $6 billion of defrauded borrowers’ debt. The settlement has yet to be approved by a judge.
- Last year, the Department of Education proposed new borrower defense rules that would expand the criteria for borrowers to make claims.
- As of June 2022:[17]
- $1.9 billion dollars had been canceled through borrower defense.
- About 94% of approved cases received a 100% cancellation.
- Cases were pretty evenly distributed between denied and approved.
Note: Closed applications were closed before the case was decided, e.g., if the borrower rescinded the application.
Source: Federal Student Aid
Other Student Loan Discharges
The government may cancel or discharge your student loans in a few other situations, as well.
Closed School Discharge
The government might cancel your loan debt if your school closes while you’re enrolled.
- Over 150,000 borrowers are eligible for a closed school discharge.Footnote [12]
- As of March 2022, roughly 146,000 borrowers had received more than $1.8 billion in closed school discharges.Footnote [12]
Total and Permanent Disability Discharge
TPD discharges apply to some borrowers who become disabled and face difficulties repaying their loans.
Recent updates to the TPD discharge program have made it easier for eligible borrowers to receive the loan forgiveness owed to them.
| Policy Update | Number of Borrowers Who Benefit | Balance Discharged |
|---|---|---|
| The Social Security Administration now automatically identifies borrowers with disabilities, so they don’t need to self-enroll. | 323,000 | $5.8 billion |
| Borrowers no longer need to provide information on their earnings. | 41,000 | $1.3 billion |
Death Discharges
Student and Parent PLUS loans are discharged after the borrower’s death. The borrower’s family or representative must provide the loan servicer with a copy of a death certificate.
Frequently Asked Questions About Student Loan Forgiveness
Will Biden forgive student loans?
In August 2022, President Biden announced student loan forgiveness for some borrowers. Pell Grant recipients are eligible for up to $20,000 in student loan forgiveness. Other qualifying borrowers can get up to $10,000 forgiven.
Who qualifies for student loan forgiveness?
Through the Biden administration’s most recent student loan forgiveness announcement, individual borrowers who earn under $125,000 a year and households who earn less than $250,000 qualify for federal student loan forgiveness.
In addition, a borrower may qualify for student loan forgiveness through fulfilling a commitment to teaching or public service (as in the case of TLF and PSLF programs) or unforeseen circumstances (like death, disability, or school closure).
What is student loan forgiveness?
Student loan forgiveness means that the federal government eliminates at least some of what student loan borrowers owe on the amount they borrowed from the government to pay for school.
Student loan forgiveness is sometimes referred to as student loan cancellation or discharge.
References
- Federal Student Loan Portfolio: By Loan Status, Federal Student Aid, an Office of the U.S. Department of Education. Accessed August 2022. ↑
- Education Department’s Decades-Old Debt Trap: How the Mismanagement of Income-Driven Repayment Locked Millions in Debt. Student Loan Borrower Assistance: National Consumer and Student Borrower Protection Center. March 2021. ↑
- Public Service Loan Forgiveness Data. Federal Student Aid, an Office of the U.S. Department of Education. July 2022. ↑
- Education Department approves $3.9 billion group discharge for 208,000 borrowers who attended ITT Technical Institute. U.S. ED. August 2022. ↑
- Federal Student Loan Portfolio: Summary, Federal Student Aid. ↑
- Report on the Economic Well-Being of U.S. Households in 2021, The Federal Reserve. May 2022. ↑
- Fact Sheet: President Biden Announces Student Loan Relief for Borrowers Who Need It Most. The White House. August 2022. ↑
- Press release: Inflation forcing Americans with student debt to skimp on everyday necessities ahead of payments resuming, survey finds. Student Debt Crisis Center. February 2022. ↑
- Temporary Expanded Public Service Loan Forgiveness. Federal Student Aid. ↑
- Fact Sheet: PSLF Program Overhaul. U.S. Department of Education. October 2021. ↑
- Teacher Loan Forgiveness. Federal Student Aid. ↑
- Loan Forgiveness Reports. Federal Student Aid. February-March 2022. ↑
- Income-Driven Repayment Plans. Federal Student Aid. ↑
- Federal Student Aid: Education Needs to Take Steps to Ensure Eligible Loans Receive Income-Driven Repayment Forgiveness. U.S. Government Accountability Office. March 2022. ↑
- Redesigned Income-Driven Repayment Plans Could Help Struggling Student Loan Borrowers. The Pew Charitable Trusts. February 2022. ↑
- Federal Student Loan Portfolio by Loan Type. Federally Managed Portfolio by Repayment Plan. Federal Student Aid. ↑
- Borrower Defense to Repayment Loan Forgiveness Data. Federal Student Aid. ↑
