Student loan debt: $9B in loan forgiveness, while other borrowers struggle to reach servicers
HOUSTON - President Joe Biden has canceled another $9 billion in student loan debt for 125,000 borrowers. Meanwhile, many borrowers say they’re having trouble getting the help they need to start repaying their loans now that the three-year pause ended this week.
The White House says the 125,000 borrowers receiving loan forgiveness have already met requirements in the Public Service Loan Forgiveness plans or Income-Driven Repayment plans, or have a total or permanent disability.
SUGGESTED: $9 billion student loans debt forgiven
FILE PHOTO. Students wear their graduation gowns outside of the White House in Washington, DC, on May 18, 2022. (Photo by STEFANI REYNOLDS/AFP via Getty Images)
"My administration will continue to use every tool at its disposal to help people with the burden of student debt so more Americans have the freedom to achieve their dreams," said President Biden at a press conference.
Meanwhile, the Student Borrower Protection Center reports that many borrowers calling loan servicers are experiencing a "nightmare" of long wait times, dropped calls, and not being able to get the information they need on their loans.
Nineteen state Attorneys General wrote to the U.S. Department of Education, expressing concern and urging it to instruct loan servicers to place affected borrowers in non-interest-bearing forbearances that count toward potential debt forgiveness until their issues are resolved.
Since several loan servicers left the business during the payment pause, the AGs say millions of borrowers have servicers that are new to their accounts and are understaffed.
If you're having trouble calling your loan servicer, it's actually best to communicate with them in writing.
SUGGESTED: New SAVE student loan repayment plan could save borrowers $1,000 a year
You can find loan repayment information and ways to contact your loan servicer on StudentAid.gov. Borrowers can also submit an Income-Driven Repayment plan request online.
You can also try to contact your loan servicer through its website.
Borrowers trying to establish a new repayment plan should try to pay their existing payment until a new payment is set up.
For those who cannot afford to make a payment, President Biden created a 12-month on-ramp to repayment, where borrowers won't be penalized for missed payments and won't be reported to credit bureaus.
Borrowers should still try to communicate about missing payments with their loan servicers and explain what's happening.