You may become eligible for student loan forgiveness with these 17 factors.

President Biden and his administration have announced a new proposed regulation to offer debt relief to student loan borrowers experiencing financial difficulties after a months-long negotiated rulemaking process.

The proposal suggests granting the Secretary of Education the authority to waive some or all federal student loan debts for borrowers who are facing hardship and their ability to fully repay the debt is likely to be impaired, or the costs of enforcing the full amount of the debt are not justified by the expected benefits of continued collection of the entire debt.

The Education Secretary may take into account any of the following 17 factors to determine hardship:

1. Household income
2. Assets
3. Type of loans and debt balance
4. Current repayment status and history
5. Total student debt balance and payments relative to income
6. Total debt balances and required payments relative to income
7. The Free Application for Federal Student Aid provides information on the receipt of Pell Grants and other financial aid.
8. Type and level of institution attended
9. Student outcomes associated with programs attended
10. Postsecondary education and relative federal financial assistance received
11. Age
12. Disability
13. Age of borrowers loan based on first disbursement
14. Receipt of means-tested public benefits
15. High essential costs such as health care, caretaking and household
16. Extent to which hardship may persist
17. Any other indicators of hardship identified by the Secretary

Borrowers may obtain debt relief through two pathways, with one or more factors playing a role. Those determined by the Department of Education to be at least 80% likely to default on their loans may have their debt automatically discharged.

The other pathway will likely involve a case-by-case approach, taking into account individual circumstances and evidence of hardship.

The proposal will be published in the Federal Register for a 30-day public comment period before being finalized and implemented as a new regulation in 2025.

The Supreme Court's ruling against President Biden's plan to enact broad student loan forgiveness in June 2023 has led to a separate proposed regulation that aims to cancel or reduce debt balances for 25 million borrowers. However, this plan is currently on hold after several states sued to block its implementation.

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