Immigrant Oral Histories

Student Loan Forgiveness: Should You Wait?

Student loan forgiveness is exactly what every person who has taken a federal student loan dreams of. And, of course, it can be understood: who among us would refuse to have their debt simply blown to the wind?

But even at first glance, we each understand that not everything is so simple. The state would hardly begin to distribute money if it did not want to return it. Overall, this is one of the main advantages of a federal student loan, along with low-interest rates. The desired loan forgiveness is dizzying but still elusive.

The most common types of loan forgiveness are:

Public Service Loan Forgiveness (and Temporary Expanded Public Service Loan Forgiveness)
Income-Driven Repayment (IDR) Forgiveness
Teacher Loan Forgiveness
Closed School Discharge
Total and Permanent Disability Discharge

But the statistics stubbornly convince us that it is not worth hoping for the forgiveness of the loan, no matter how tempting it may be. For example, as of January 2021, only 32 borrowers have ever received income-based student loan forgiveness after more than 20 years of repayment. In addition, however, 1.3 million borrowers who qualify for public service loan (PSLF) forgiveness have not received their forgiveness.

What's more, the administration is currently not accepting student loan write-offs at all after a second federal court shut down the program. Instead, President Joe Biden announced in August plans to write off up to $20,000 of federal student loan debt for individuals below $125,000 or households below $250,000. The White House estimates that more than 40 million people may qualify.

About 26 million people have already applied, and 16 million applications have been approved. However, due to a court ruling, none of the benefits were actually repaid.

As a result, the reality is that no matter your loan, you will have to pay it back. All in all, this shouldn't surprise anyone. When we lend something, we want it to be returned to us. Money, whether federal or private, needs to be repaid no less than our borrowed book, for example. So any loan should be taken seriously and only rely on yourself and the fact that it will need to be repaid. And waiting for forgiveness is like waiting for a magic spell that suddenly conjures millions of dollars just like that.