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2d ago

Bill Would Count Unemployment Toward Student Loan Forgiveness

The Democratic bill faces uncertain prospects in a Republican-led Congress.

WASHINGTON, DC - JUNE 30: Student debt relief activists participate in a rally at the U.S. Supreme Court on June 30, 2023 in Washington, DC. In a 6-3 decision the Supreme Court stuck down the Biden administration’s student debt forgiveness program in Biden v. Nebraska.
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Overview

  • H.R. 8475 would let months in unemployment deferment with a required $0 income-driven payment count toward federal loan forgiveness.
  • The proposal also sets a 15-year timeline to erase remaining balances for borrowers who meet monthly payment obligations.
  • Under current rules, unemployment deferment stops the clock on both income-driven repayment forgiveness and Public Service Loan Forgiveness.
  • Rep. Rosa DeLauro introduced the House bill with nine Democratic co-sponsors, and Sens. Jeff Merkley and Tim Kaine filed identical Senate versions.
  • If enacted, borrowers would still need to enroll in a qualifying plan, certify income or unemployment, track qualifying months with their servicer, and apply through StudentAid.gov.