Understanding Student Loan Forgiveness

By Tyler Lary

The Biden Administration’s recent announcement of another debt forgiveness program raised the hopes for one University of Georgia student, at least temporarily.

Maggie Clegg, a senior housing management and policy major, said she was hoping to apply for the debt relief. 

“But I found out I do not qualify for the program yet, unfortunately,” Clegg said. “That could have removed a lot of stress for me.”

The program announced on Feb. 21 aims to forgive $1.2 billion in student debt for over 150,000 borrowers, according to statements from the administration.

To qualify for this forgiveness initiative, borrowers must be enrolled in the Saving on a Valuable Education (SAVE) repayment plan. They must show they have made payments for at least 10 years on an initial loan of $12,000 or less, according to the White House website.

Those requirements were unfortunate news for Clegg, who is seeking loan forgiveness after she graduates. She and other undergraduate students who are in school or just graduated, cannot apply for most debt relief programs until after 10 years of payments are made, but she believes there should be a debt relief program of some sort for students immediately after graduation.

“In today’s world, it is hard to find a job right now and a lot of people won’t be able to make enough money to afford their everyday expenses while paying off student loans every month,” Clegg said. “There should be a program that delays our student loan payments until we can get a steady job.”

Clegg knew she would need help funding living expenses and tuition when arriving at UGA. She said the only sort of relief she was able to get was subsidized student loans, which gave her less of a financial burden while she was in school.

“You want all your loans to be subsidized, because that means until six months after you graduate, there will be no interest or payments due,” said Ben Dobler, a Personal Choice Financial Advisor (PCFA).

Unsubsidized loans build interest even though payments are not required until after graduation. Student’s Free Application for Federal Student Aid (FAFSA) profile will decide if a student is eligible for subsidized loans, according to Dobler.

Dobler said various debt relief programs such as the Public Service Loan Forgiveness (PSLF), will forgive student loan debt to qualified applicants.

Student loan borrowers who make 10 years of payments under a qualifying repayment plan, while working full-time for a qualifying employer such as the government or a non-profit organization, are qualified to have the remainder of their balance from direct loans dismissed, tax-free, according to Federal Student Aid.

“If you meet those requirements, I’ve seen people get hundreds of thousands of dollars of loans forgiven through PSLF,” Dobler said.

The PSLF program Dobler referenced has forgiven over $56 billion of student loan debt for over 750,000 people, according to reporting by NerdWallet.

Nevertheless, the current outstanding federal and private student loan debt is $1.75 trillion in the United States, according to the Federal Reserve. Over 45.3 million people have student loan debt, of which 92% hold federal loan debt.

And according to Best Colleges debt statistics, the debt load is continuing to grow. It reported the average debt attributed to federal student loans more than doubled since 2007, from $18,233 to $37,090 at the end of 2023.


Tyler Lary is a journalism student at the University of Georgia


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