Biden Proposes To Extend Limited Waiver For Student Loan Forgiveness

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Biden Proposes To Extend Limited Waiver For Student Loan Forgiveness

Zack Friedman

Senior Contributor

CEO, Mentor (mentormoney.com). Bestselling Author, The Lemonade Life.Follow

Jul 9, 2022,08:30am EDT

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President Joe Biden (Photo by Angelo Merendino/Getty Images) GETTY IMAGES

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:

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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:

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  • 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

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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 Educa

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