Biden May Cancel $10,000 of Student Loans for these Borrowers Only

By Mentor Staff | Edited By Mentor Staff

Updated On March 26, 2022

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President Joe Biden may cancel $10,000 of student loans. However, student loan cancellation may not be available for everyone. Here’s what you should know about this new proposal.

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Variable APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Variable APR means that your interest rate can fluctuate over time, which can increase or decrease your monthly student loan payment. Typically, a variable-rate loan has a lower introductory rate than a fixed-loan rate loan. Variable APR includes a 0.25% discount when you enroll in autopay.
Fixed APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Fixed APR means that your interest rate will always stay the same. Even if interest rates change, your interest rate or monthly payment will not. Fixed APR includes a 0.25% discount when you enroll in autopay.
APR
3.40% - 8.40%
3.99% - 8.24%
3.40% - 8.40%

View Details

on SoFi's website

Overview

Variable APR:
3.40% - 8.40%
Fixed APR:
3.99% - 8.24%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.49% - 7.99%
3.74% - 8.49%
2.49% - 8.49%

View Details

on Earnest's website

Overview

Variable APR:
2.49% - 7.99%
Fixed APR:
3.74% - 8.49%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
2.49% - 7.99%
3.74% - 8.49%
2.49% - 8.49%

View Details

on NaviRefi's website

Overview

Variable APR:
2.49% - 7.99%
Fixed APR:
3.74% - 8.49%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,001 ($10,001 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
2.48% - 7.24%
4.29% - 7.29%
2.48% - 7.29%

View Details

on ELFI's website

Overview

Variable APR:
2.48% - 7.24%
Fixed APR:
4.29% - 7.29%
Minimum Credit Score:
680
Minimum Income:
$35,000
Fees:
None
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.49% - 11.72%
2.59% - 8.74%
2.49% - 11.72%

View Details

on Splash's website

Overview

Variable APR:
2.49% - 11.72%
Fixed APR:
2.59% - 8.74%
Minimum Credit Score:
640
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5 – 25 years
Borrower Residency:
All states
Hardship Deferment:
Varies
Co-signer Option:
No
3.84% - 10.07%
4.49% - 10.11%
3.84% - 10.11%

View Details

on Citizens' website

Overview

Variable APR:
3.84% - 10.07%
Fixed APR:
4.49% - 10.11%
Minimum Credit Score:
Not disclosed
Minimum Income:
$24,000
Fees:
No prepayment or origination fees
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 6.30%
3.99% - 6.40%
2.50% - 6.40%

View Details

on Laurel Road's website

Overview

Variable APR:
2.50% - 6.30%
Fixed APR:
3.99% - 6.40%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
4.13% - 7.39%
2.99% - 9.93%
2.99% - 9.93%

View Details

on LendKey's website

Overview

Variable APR:
4.13% - 7.39%
Fixed APR:
2.99% - 9.93%
Minimum Credit Score:
680
Minimum Income:
$24,000
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except ME, ND, NV, RI, WV
Hardship Deferment:
Yes
Co-signer Option:
Yes
-
3.94% - 9.08%
3.94% - 9.08%

View Details

on ISL's website

Overview

Variable APR:
-
Fixed APR:
3.94% - 9.08%
Minimum Credit Score:
670
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except OR and ME
Hardship Deferment:
Yes
Co-signer Option:
Yes

Biden could cancel $10,000 of student loans

Since becoming a presidential candidate, Biden has supported $10,000 of student loan cancellation for borrowers. Now, a new plan could help Biden achieve his campaign goal. Several private student loan companies have pushed a new proposal that would cancel student loans for certain student loan borrowers.

According to the plan, Biden should cancel student loans for student loan borrowers who meet the following:

  • Low income
  • Struggling financially
  • Student loan default
  • Student loan delinquency

Rather than provide wide-scale student loan cancellation, this new plan would target student loan forgiveness only for borrowers who need financial relief the most. The plan doesn’t specify what “low income” or “struggling financially” means.

That said, student loan default means a student loan borrower hasn’t paid a student loan in at least 270 days. Student loan delinquency means a borrowers hasn’t paid a student loan in at least 90 days.

(Learn more: How to pay off student loans)

Democrats call for $50,000 of student loan cancellation

While progressive Democrats in Congress support wide-scale student loan cancellation, they want to maximize student loan forgiveness for most or all borrowers. For example, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) want Biden to cancel $50,000 of student loans.

Based on their plan, student loan cancellation only would be available to federal student loan borrowers who earn up to $125,000 annually. Biden has opposed $50,000 of student loan forgiveness and has said that Congress, not the president, should cancel student loans. Biden believes he doesn’t have legal authority to enact wide-scale student loan cancellation.

Last week, Biden announced plans to cancel $6.2 billion of student loans. Previously, Biden cancelled $15 billion of student loans since becoming president.

(Read: The Ultimate Guide To Student Loan Forgiveness)

Why private student loan companies want to target student loan cancellation

While many student loan borrowers want total student loan cancellation, not everyone agrees. For example, some private student loan companies argue that wide-scale student loan cancellation would provide student loan forgiveness to too many borrowers.

Instead, they believe targeted student loan cancellation would help provide student loan relief to the most financially vulnerable borrowers. This way, higher income earners such as doctors, lawyers and dentists who can afford student loan payments wouldn’t need student loan forgiveness. This helps the federal government save money, which could be used to help pass Biden’s legislative agenda.

(Learn more: How to pay off $100,000 of student loans)

Will Biden cancel student loans?

Biden hasn’t decided on whether he will issue an executive order to enact wide-scale student loan cancellation. Some members of Congress are urging the president to cancel student loans to cancel student loans during the Covid-19 pandemic. However, Biden has focused on targeted student loan cancellation rather than wide-scale student loan forgiveness. Expect more student loan forgiveness for certain borrower groups, including public servants, borrowers with a permanent disability, and borrowers who qualify for student loan forgiveness through borrower defense to repayment. That said, it’s less likely that Biden will enact wide-scale student loan cancellation for all student loan borrowers.

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