There’s some track record of this working: The government recently forgave $5.8 billion in debt for 560,000 people who attended the now-defunct Corinthian College, and another 200,000 borrowers saw a collective $6 billion forgiven as a result of the Sweet v. Cardona settlement.
“We've got 45 million people with student loans,” Gokey said. “If enough of us get organized and refuse to cooperate, we can fundamentally transform our economy.”
Income-Driven Repayment
The income-driven repayment program is another option for low-income borrowers.
Under this program, the repayment amount is based on the difference between 150% of the applicable poverty level and a person’s annual income. One in three borrowers with federal loans are currently enrolled in some form of IDR.
The system is rife with issues. Out of 70,300 loans that were still in repayment and eligible for IDR-based forgiveness as of late 2020, only 157 had been approved for forgiveness.
Even so, Gokey said applying for IDR can be a relatively low-risk option.
Stay in School
It's counter-intuitive, but additional education is one way to put off student loans. Borrowers still in school are typically eligible for deferment, as long as they're enrolled at least part-time.
However, be sure to read the fine print about interest, Diodato said. Some kinds of loans like direct unsubsidized ones accrue interest even while in deferment. Of course, more school means more debt for many students, which is likely not an advisable strategy.
This article was provided by Bloomberg News.