Student loans are a big issue in the US. It affects many layers of society. Students and their family members are directly affected by it. So do banks and credit societies that offer these loans. Needless to say the educational institutes attended by students feel the rippling effects of student loans. 

If you are from the US, and haven’t been living under a rock for the last two years or so, you are aware of the political ramifications of student loan and student loan forgiveness. Total student debt is huge, akin to credit card debt. 

I’ll discuss all these in a minute, but first, let me give you an idea of how student loan forgiveness works, and how it is beneficial for students, and also for the country in the long run. That being said, I am not fully in support of student loan forgiveness, as I am aware of many of its downsides.

US Student Loan Percentage

In the US, around 70% of students take loans for higher studies. They take loans to cover all the expenses that come with studying in US graduate colleges. The breakdown of student loans based on the type of institutions they attend show that around 37% of those who attend public 4-year institutions take loans. Of students who attend private 4-year institutions, around 67% take loans. 

This stark disparity between public and private universities is because of government funding and the lack thereof. Public universities receive funding from the federal and state government. So they can waive tuition expenses to a huge extent, unlike their private counterparts that are so expensive that students are often pushed towards taking loans to cover the gap between financial aid and the total educational cost.

Student Loan Forgiveness Programs

The United States already has a few programs in place for student loan forgiveness, but there’s also discussion going on about broader forgiveness initiatives. The most common forgiveness programs include 

  • Public Service Loan Forgiveness (PSLF): If you work full-time for the government or a qualifying nonprofit and have made 10 years’ worth of qualifying payments (120 total) by the end of that period, you can have the remaining amount of your federal student loan forgiven.
  • Income-Driven Repayment (IDR) Forgiveness: For loans being repaid under Direct Income-Driven Plans, any remaining balance of federal student loans is forgiven once the needed amount of full-price repayments have been made for 20 or 25 years.
  • Teacher Loan Forgiveness: Students who, after the end of their academic careers, become students and then work at low-income schools for a minimum of five years qualify for this forgiveness program. Such teachers can have some of their (federal) loan amounts forgiven.
  • Borrower Defense to Repayment: This loan forgiveness program is rather uncommon. If your school misled you, withheld information or in the case of irregularities, you could be eligible for loan reimbursement. However, it could be difficult for you to prove your case. More so, because schools can easily hire top lawyers, but students might find it tough due to lack of experience and monetary constraints. 

Almost all programs are partial loan forgiveness programs. The division of education is changing some current programs to streamline their operational effectiveness and make them more easily accessible to students.

Student Loan Forgiveness Updates

Student loan forgiveness is a hot topic in the US right now, so much so that it could influence the result of the 2024 presidential election. A bit of a background; before Joe Biden became the President of the US, he promised to give students relief from loans they have taken. According to NerdWallet, the Biden administration has so far forgiven $143.6 billion. However, the total amount of student loans in the US is almost $2 trillion, which means there’s still so much more to do.

Student Loan Forgiveness Criticisms

As stated earlier, student loan forgiveness has a political aspect that cannot be ignored. Joe Biden’s promise of forgiving student loans have been vociferously attacked by Republican senators. Not all democratic reps were on board either. Their primary opposition was that the US debt levels are already high. If another $1.7 trillion gets added, then the debt might spiral out of control.

That’s not the only criticism against student loan forgiveness. Those who opposed Biden’s proposal to forgive student loans said the plan would be discriminatory against students, who in the past took out loans to further study, and then toiled hard to pay back the entire loan amount.

Recent Happenings in America

Despite all these criticisms, the Biden Administration announced students who took loans would get a one-time relief of $20000. However, shortly afterwards, Federal Judges ordered to halt the program by calling it “unconstitutional.” Even though Biden said he’d use detours to give borrowers debt relief, he didn’t go into the specifics.


It’s unclear at this moment how broad-based forgiveness will happen in the US. That being said, Thi Biden administration, and the Department of Education is focused on improving existing programs for now, and that’s a good thing.

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