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Biden College Loan Forgiveness and 5 Things to Know About it

Are you aware of the Biden College Loan Forgiveness? The Biden administration has been touting $25 billion in student loan forgiveness. And this has been approved for borrowers during the last year and a half.

Biden College Loan Forgiveness and 5 Things to Know About it

At least $1.3 million borrowers have been determined to be eligible. Would you love to learn more about this? Just continue reading then. Trust me, you will be glad you did.

But given the multiple student loan relief programs involved, the ongoing student loan payment was paused. And there were significant changes to the student loan servicing system that continue to play out.

Many borrowers may not even know about these initiatives. Here’s what you need to know about the Biden college loan forgiveness.

Biden College Loan Forgiveness is Through Targeted Initiatives

The Biden college loan forgiveness initiatives have, so far, been through “targeted” relief. This involves the administration focusing on existing student loan forgiveness programs.

It makes use of the executive action to ease restrictions, expand access, or streamline the application or approval process.

Below are the programs the administration has largely focused on so far:

  • $7.9 billion in student loan cancellation for borrowers defrauded or harmed by their schools. This includes Borrower Defense to Repayment, where a school misrepresented the truth of key aspects of an education program and the Closed School Discharge program, where a school’s closure prevented borrowers from completing their degree. The Education Department estimates that these initiatives have approved around 690,000 student loan borrowers for discharge.


  • $7.3 billion through the Limited Public Service Loan Forgiveness (PSLF) Waiver program. This temporarily relaxes the PSLF rules to dramatically expand access for borrowers, who have devoted their careers to public service work. At least 127,000 borrowers have been approved so far, according to the Education Department. The Limited PSLF Waiver program ends on October 31, 2022.


  • At least $8.5 billion in total in permanent disability (TPD) discharges for borrowers who are disabled. And the Department streamlined access to this program by automating the application process for borrowers receiving Social Security Disability benefits. More than 400,000 borrowers have benefited so far, says the administration.

Why Some Student Loan Forgiveness Relief is Automatic

Why Some Student Loan Forgiveness Relief is Automatic

In an effort to provide streamlined relief, the Biden administration has endeavoured to provide automatic student loan forgiveness wherever possible.

For example, the administration recently approved nearly $6 billion in student loan forgiveness for 560,000 borrowers.

The above is under Borrower Defense for Repayment for those who previously attended Corinthian Colleges, a for-profit college chain that collapsed in 2015. Eligible borrowers do not even have to submit an application.

Additionally, much of the TPD discharge relief is also automatic through a data-sharing initiative. And this is between the Department of Education and the Social Security Administration.

What You Should Know

Apart from the Biden college loan forgiveness, note this. For other programs, it’s a bit more complicated. For direct loan borrowers who have already certified their public service employment, many have already received automatic student loan forgiveness.


The forgiveness is under the Limited PSLF Waiver, as the Department is providing some relief automatically when it can. But other borrowers may have to take action to qualify.


It can be confusing for borrowers to know whether or not action is required to obtain some of the new student loan forgiveness and associated relief:

  • For the Limited PSLF Waiver (and for the newer IDR adjustment initiative), borrowers with FFEL-program loans would need to consolidate those loans via the Federal Direct consolidation program for those loans to qualify.
  • Also, any borrower (whether they have Direct or FFEL loans) would need to certify their public service employment. And this is on formal Department of Education PSLF forms to get credit during the Limited PSLF Waiver period. The deadline is October 31, 2022.

Information for Disabled Borrowers on the Biden College Loan Forgiveness

Amidst the Biden college loan forgiveness, note. For disabled borrowers, even if you do not qualify for automatic relief on the basis of Social Security disability benefits, note. You can still submit a formal application for discharge.

However, you may need to include a physician’s certification form. Also, a part of the application completed and signed by your doctor. That is to confirm that you meet the eligibility criteria.

Under Biden, Federal Student Loan Forgiveness is Not Taxable for Now

Federal student loan forgiveness under any program is not considered taxable income under federal law. And this is under the American Rescue Plan Act passed by Congress and signed by President Biden last year.

Normally, when a debt is cancelled, forgiven, or discharged, it could be considered taxable “income” for the borrower unless there is a specific carve-out in federal law).

However, this relief is temporary and is set to end at the end of 2025, unless Congress extends it or makes it permanent.

Notably, there is an existing carve-out for Public Service Loan Forgiveness (PSLF), which should remain tax-free under federal law even after 2025.

More Student Loan Forgiveness May Be Coming

More Student Loan Forgiveness May Be Coming

The Biden administration has indicated that the $25 billion in Biden college loan forgiveness approved so far may just be the beginning.

This figure does not include any student loan forgiveness under recently-announced changes to Income-Driven Repayment (IDR) programs, which may result in billions of additional student loan forgiveness.

However, those changes are not expected to be implemented until later this fall at the earliest.

Meanwhile, the Biden administration is also considering executive action to enact wide-scale student loan cancellation.

No final decisions have been made, but recent reports suggest the President may make a final decision by August. Stay glued to this page to get the latest update. Ensure you share this information with your loved ones.

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