Only 32 student loan borrowers – ever – qualified for full forgiveness through an income-based repayment plan

  • The first federal income-based repayment plan was created in 1995 and has since registered millions of student loan borrowers in the programs.
  • But only 32 people have already qualified for the full student debt forgiveness through federal repayment plans.
  • The report comes as House Democrats passed a provision on the stimulus bill that student debt forgiven until 2025 will not be taxed.

According to a National Consumer Law Center study released Monday, only 32 borrowers have already qualified for full student loan waivers under federal income-tested repayment programs.

The first income-based repayment plan (IDR) – then known as income-based repayment – was introduced in 1995, providing student loan borrowers with the flexibility to set their monthly payments based on their income.

Over the years, other IDR plans have emerged – all of which have a similar goal of setting a “borrower’s monthly payment based on a portion of the borrower’s income and writing off any remaining loan balances after 20 to 25 years of payments “according to the NCLC report.

More than eight million borrowers are currently enrolled in repayment programs, and two million people have been repaying for more than 20 years, citing the guidance note. But in the more than 25-year existence of federal repayment programs, only 32 people have been eligible for full student debt cancellation.

“The cancellation was designed to ensure that low-income borrowers can eventually lift themselves from the burden of unaffordable debt and insulate them from the adverse financial effects of this ‘negative amortization’ – ensuring that federal student loans do not not become the type of debt trap commonly associated with predatory payday loans and subprime mortgages, ”the study said.

“If this structure worked as intended when it was first authorized over two decades ago, low-income borrowers would routinely have their debts canceled under the IDR today.”


The NCLC guidance note comes as Democrats included a provision allowing a tax exemption on all student loans until the end of 2025 as part of the $ 1.9 trillion stimulus bill that the House signed on Wednesday.

The provision of the next stimulus bill came as Biden extended the forbearance on student loans until September. The president also expressed his support by forgiving $ 10,000 in student loan debt, but Democrats are increasingly pressuring him to write off $ 50,000 per borrower.

The stimulus provision was included by Senator Bob Menendez of New Jersey and the Senator. Elizabeth warren from Massachusetts, who previously ran a presidential campaign on the student debt forgiveness platform. Warren shared an Inside Higher Ed article on the NCLC report on Twitter on Wednesday.

“Our student loan system is broken,” Warren wrote in the tweet. “The income-based repayment is supposed to provide relief – but only 32 people ‘loans were canceled by the program. Not 32,000. Only 32.”

“We need to stop blaming student borrowers for this mess and #CancelStudentDebt now,” she wrote.

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