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Biden Proposes To Extend Limited Waiver For Student Loan Forgiveness

President Joe Biden will extend the limited waiver for student loan forgiveness.

Here’s what you need to know — and what it means for your student loans.

Student Loans

Biden’s Education Department announced major changes to student loan forgiveness this week. Specifically, Biden is helping millions of student loan borrowers get student loan cancellation and student loan forgiveness more easily. This includes changes to:

Notably, Biden’s proposal effectively makes major parts of the limited waiver for student loan forgiveness permanent. Let’s explore.


Student loan forgiveness: limited waiver

The limited waiver for student loan forgiveness is a game-changer for student loan borrowers seeking student loan forgiveness. For example, student loan borrowers who are public service loan forgiveness and income-driven repayment plans can benefit from the limited waiver. The goal of the limited waiver is to relax the rules for student loan forgiveness and allow borrowers to “count” student loan payments that were previously ineligible toward student loan forgiveness. Here are some key benefits of the limited waiver for student loan forgiveness:

  • FFELP Loans and Perkins Loans student loan payments will count for student loan forgiveness;
  • student loan payments before student loan consolidation count toward student loan forgiveness;
  • student loan payments made under the wrong student loan repayment plan count toward student loan forgiveness;
  • late or incorrect student loan payments count toward student loan forgiveness; and
  • student loan payments made during active military service — even if the borrower was enrolled in temporary student loan forbearance or deferment — count toward student loan forgiveness.

Currently, student loan borrowers have until October 31, 2022 to benefit from the limited waiver for student loan forgiveness. After that, the limited waiver was scheduled to expire.


Limited waiver for student loan forgiveness could become permanent

Biden’s major changes to student loan forgiveness will incorporate several features of the limited waiver and make them permanent. For example:

  • make it easier for student loan borrowers to qualify for student loan forgiveness;
  • “count” partial, lump-sum, and late student loan payments toward student loan forgiveness; and
  • allow certain types of student loan deferments and student loan forbearances (such as those for military service, National Guard duty and Peace Corps and AmeriCorps service) to count toward public service loan forgiveness.

However, the U.S. Department of Education notes that some of the limited waiver provisions will not become permanent due to “statutory restrictions.” For example, suppose you have FFELP student loans. In that case, you should apply for public service loan forgiveness before October 31, 2022 to ensure you can “count” previous student loan payments under the limited waiver for student loan forgiveness.


Student loans: next steps

If you’re excited about Biden extending the limited waiver for student loan forgiveness, then you have reason to celebrate. This relaxation of the rules for student loan forgiveness will help you get student loan forgiveness faster. If you want to shape the future of student loan forgiveness, the Education Department is giving the public 30 days to comment on the proposed rules. After the public comment period, the Biden administration will finalize the rules by November 1, 2022 and implement the final rules on student loan forgiveness by July 1, 2023. Importantly, these rules are separate from any potential wide-scale student loan cancellation and the end of the student loan payment pause on August 31, 2022. Make sure you’re prepared for the restart of student loan payments beginning September 1. Here are some smart ways to pay off student loan debt faster:


Student Loans: Related Reading

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