Student Loan Debt: How To Save With the Biden Student Loan ForgivenessProgram

The cost of college has been steadily rising for decades, and student loan debt is proof of that. In the first half of 2018 alone, student loan debt increased by almost $50 billion. With numbers like that, it’s no wonder so many recent graduates find themselves struggling to repay their loans.

Luckily, there are programs in place to help alleviate this burden and save you money in the long run. One such program is the Biden Student Loan Forgiveness Program (BSLFP). This article will cover everything you need to know about the BSLFP and how it can reduce your student loan bill.

What is the Biden Student Loan Forgiveness Program?

The Biden Student Loan Forgiveness Program is a federal program that allows borrowers to have a portion of their student loan debt forgiven after making 120 on-time repayments.

The actual amount forgiven will depend on each person’s loan type and balance. The program was created by former Vice President Joe Biden in 2007, hence the name “Biden Student Loan Forgiveness Program”. This program was created to ease the financial burden of repayment for recent college graduates who are struggling with their student loan debt.

How Does the Biden Student Loan Forgiveness Program Work?

Under the BSLFP, participants have 120 “on-time” payments made towards their student loan(s) to be eligible for having the remainder forgiven. “On-time” payments are those made at the correct due date and amount.

Under this program, the federal government will forgive any remaining loan balance after 120 payments. The amount of forgiveness will be based on the type of loan that was used to finance attending college.

Borrowers with a Direct Loan or Federal Family Education Loan (FFEL) will see their balance forgiven after 10 years. Those with a Graduate PLUS Loan will see forgiveness after only 5 years.

Requirements to Qualify for BSLFP

There are a few requirements you must meet in order to qualify for BSLFP. You must have the following to be considered for the program:

Be a new borrower as of October 1, 2007

Borrowers who took out their first student loan after October 1, 2007 are eligible to participate in the BSLFP. Those who borrowed before this date will need to look at other forgiveness programs.

Be on an Income-Driven Repayment Plan

You must be on an income-driven repayment plan to be considered for BSLFP. This includes the following:

1. Have Direct Loans or FFEL Loans: You must have taken out a Direct Loan or FFEL loan to be considered for BSLFP. If you have a Perkins or Parent PLUS Loan, you will need to look at other forgiveness programs instead.
2. Make 120 on-time payments: Borrowers must make 120 on-time payments towards their loans to be eligible for having the remainder forgiven.

Pros of the BSLFP

1. No Application or Paperwork Required: The BSLFP does not require you to submit any application or paperwork. Simply make 120 on-time payments towards your student loans and the remaining balance will be forgiven after 10 or 5 years.
2. No Taxes on Student Loan Forgiveness: Unlike other forgiveness programs, any amount forgiven under the BSLFP is not considered taxable income. This means you won’t have to file any extra paperwork or pay any extra taxes on the forgiven amount.
3. No Extra Credit Check: Unlike other forgiveness programs, the BSLFP will not trigger an extra credit check. This means you won’t have to go through the hassle of being further delayed on your other loan applications.

Cons of the BSLFP

1. Lengthy Waiting Period: The primary disadvantage of the BSLFP is that you must make 120 on-time payments towards your student loans before any balance is forgiven. This means a minimum of 10 years of payments before any debt is forgiven. This is a long waiting period, and not ideal for those in debt.
2. Repayment Period is Longer: Another disadvantage of the BSLFP is that it requires you to make payments over a longer period of time. While most repayment plans have borrowers make payments over 10 years, those on the BSLFP will make payments over 20 years.
3. No Help with Interest: With other forgiveness programs, any amount forgiven will also help pay off interest on your loan. The BSLFP does not do this. This means that you will still have to pay off any interest on your loan despite having a portion of it forgiven.

Final Words: Is The BDL Loan Forgiveness Program Worth It?

The BSLFP is a great program that can help anyone struggling with their student loan debt. Make 120 on-time payments towards your loan and see a portion of your balance forgiven after 5 or 10 years.

The BSLFP is a great option for anyone who is struggling with their student loan repayment and wants help getting out of debt sooner. Be sure to keep an eye out for information about the program and its benefits so you can take advantage when the time is right.