During that decade, you must work full-time at a qualifying job, repay what’s called a Direct Federal Loan, and pay into an income-driven repayment plan. Hundreds of thousands of teachers and social workers have recently been debt-free thanks to Biden administration fixes like the one Ann wrote about.
I have summarized several changes to the program in the 2021 column. You can read the profiles of many people who have cleared their balances in the 2022 column. In May, I wrote about a 28-year-old who helped his retired mother pay off her debt.
Closed or underperforming schools
For years, the Department of Education has maintained a way to cancel student loan debt that allows for “borrower protection.” It allows people to petition the government if they believe their school misled them, engaged in misconduct, or violated state law regarding credit or the services the school is supposed to provide.
President Donald J. While Trump was in office, the Department of Education sought to tighten rules and slow down the process. Under President Biden, the Department of Education relaxed the rules a lot. In 2022, many students who took out loans to attend for-profit schools or those run by chains such as Westwood College, Corinthian Colleges, DeVry University and ITT Institute of Technology (including schools that have closed entirely) will have their loan balances wiped out.
The Department of Education has a good explanation of borrower protection on its website.
Bankruptcy Discharge
Yes, you can pay off your student loan debt by filing personal bankruptcy. No, it’s not easy.
In order to clear your debt in court, you must meet a certain legal standard — proving that repayment would create “undue hardship.” Often, it can be argued that there is a “lack of confidence” that you will ever pay off your debt. It depends on the judicial district you are in and the judge hearing your case.
But total discharge of debt is not possible. Last year, the Biden administration made some changes to make the process a little easier, and Tara wrote about it in November.
