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<ul class="summary-list"><li>Biden has implemented targeted student-loan forgiveness efforts over the past few years.</li><li>BI spoke to some millennials who received relief through different programs.</li></ul>Scott M. Smith, 40, wasn't expecting <a target="_blank" href="https://www.businessinsider.com/new-student-loan-forgiveness-borrowers-save-plan-pslf-debt-cancellation-2024-4">student-loan forgiveness</a>.After receiving his master's in education administration in 2015 — preceded by his undergraduate education degree in 2008 — Smith held a student-loan balance of about $30,000 from both degrees. Since his work has been in public service, currently as a teacher, Smith decided to apply for the <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-who-qualifies-for-latest-debt-relief-idr-2023-12">Public Service Loan Forgiveness program</a>, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.But despite working full time for a qualifying employer, Smith said, he wasn't hopeful for forgiveness because his student-loan servicer told him in 2022 he hadn't met his qualifying payments.That all changed with a letter from his servicer — reviewed by Business Insider — on February 15, 2023, stating: "We determined you have successfully met the requirements of the PSLF Progam and your loans listed below have been forgiven. Thank you for your public service!"With that letter, Smith's remaining $23,086 student-debt balance was officially gone."I was shouting it from the rooftops and walking around my school like, 'Hey, everybody who's been out of school for 10 years or so,' advertising that," Smith told BI. "So then I was helping a lot of my colleagues to get that information, as well."<div type="image" title="Scott M. Smith" height="315" width="420" msid="112523207" hostid="261" sizebytes="11892"></div>Since the Supreme Court <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-blocked-supreme-court-strikes-down-debt-cancellation-2023-5">blocked President Joe Biden's broad student-loan forgiveness plan</a> last summer, the Education Department has erased debt piecemeal by focusing on existing programs like PSLF. Many of these previously did not work as intended due to administrative hurdles and paperwork errors that left borrowers paying off more than they might've owed.Such <a target="_blank" href="https://www.businessinsider.com/student-loan-debt-cancellation-payment-pause-borrowers-disabilities-defrauded-2021-6">programs have provided relief to millions of borrowers over the past few years, including </a>borrowers <a target="_blank" href="https://www.businessinsider.com/biden-education-department-cancels-student-debt-borrowers-disabilities-paperwork-cardona-2021-3">with a total and permanent disability</a>, those <a target="_blank" href="https://www.businessinsider.com/biden-wiped-out-student-debt-education-department-corinthian-college-2022-6">defrauded by the schools they attended</a>, and those who had <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-debt-cancellation-save-income-driven-payment-plan-2024-2">made at least 20 years of qualifying payments</a> on income-driven repayment plans but had yet to receive the relief they were eligible for.The relief is a particular bright spot for people of Smith's age.Millennials who've gotten their loans wiped out told BI that they're now able to celebrate by investing in their futures and pursuing other life goals, such as buying a home, that their generation has famously lagged in pursuing.In the $1.7 trillion student-debt crisis, which affects over 40 million Americans, <a target="_blank" href="https://www.businessinsider.com/typical-student-loan-borrower-balance-millennial-woman-debt-relief-biden-2023-11">millennials, who are roughly 28 to 43, today </a>hold a significant portion of the load. According to recent Federal Student Aid <a target="_blank" href="https://studentaid.gov/data-center/student/portfolio">data</a> for the third quarter of 2023, 14.8 million student-loan borrowers ages 25 to 34 — older Gen Zers and younger millennials — hold $483 billion outstanding in student debt. That same data shows that 12.2 million borrowers ages 35 to 49 — older millennials and younger Gen Xers — hold $534 billion outstanding in student debt.<a target="_blank" href="https://www.federalreserve.gov/publications/files/2023-report-economic-well-being-us-households-202405.pdf">According</a> to the Federal Reserve, the median amount of student debt borrowers held in 2023 was between $20,000 and $24,999, and borrowers with higher levels of education were more likely to carry larger student debt loads.This relief could not have come at a better time for Smith. He said that he and his wife were hoping to grow their family with a second child but that his nearly $600 student-loan payments being deducted from his bank account each month strained their budget, making it difficult to plan for baby No. 2. The loan forgiveness has freed up their budgets to buy a larger car for their family — and he and his wife are now expecting."We have another thousand dollars every two months that we could put into something else," Smith said.Knowing how many borrowers have student debt, Smith said he's grateful for this relief, which allows him to move forward in life and grow his family without that financial burden weighing him down."It was huge. It really started things to be as great as they are right now," Smith said. "I'm the happiest that I've ever been, and that was a definitive point. February of 2023 was when things started to get better again."<h2 id="10129122-48c9-4ef3-a0e4-36323175654d">The freedom to go back to school</h2>For Paul Smylie, 39, student-loan forgiveness means something else.After graduating with an undergraduate degree in geography in 2007, Smylie had a student-debt balance of just over $36,000. He began repaying those loans on an <a target="_blank" href="https://www.businessinsider.com/how-to-get-idr-student-debt-relief-account-adjustment-biden-2023-7">income-driven repayment plan</a>, which promises debt relief after at least 20 years of qualifying payments. As of 2024, Smylie was able to get his balance down to $9,811 — but that was after paying about $46,000 because of interest.Given that Smylie had not yet completed his 20 years of payments, he didn't qualify for relief through his income-driven repayment plan. However, <a target="_blank" href="https://www.businessinsider.com/save-plan-student-loan-borrowers-new-debt-relief-save-income-driven-plan-2024-2">Biden's new SAVE income-driven repayment plan</a> offered a glimpse of hope — a provision within the plan allowed for student-loan forgiveness on loans with an original balance of $12,000 or less after as few as 10 years of payments.After SAVE was implemented in July 2023, Smylie enrolled in the plan and had four loans remaining to pay off — each of which was under $12,000. On February 21, the Education Department announced it would be implementing the new forgiveness provision ahead of schedule, announcing <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-debt-cancellation-save-income-driven-payment-plan-2024-2">$1.2 billion in relief for 153,000 borrowers</a>. To Smylie's surprise, he was one of them.As of August 9, the 8th Circuit Court of Appeals has <a target="_blank" class="" href="https://www.businessinsider.com/save-plan-blocked-cheaper-student-loan-payments-relief-new-ruling-2024-8">blocked SAVE</a>. Students with loans enrolled in the program have been placed into forbearance pending the results of continued legal battles over whether the lower payments and forgiveness measures in the payment plan can continue.While some experts have suggested a complete reversal of the SAVE plan could result in forgiveness being rolled back and loans being reinstated, the <a target="_blank" class="" href="https://apnews.com/article/student-loan-cancellation-debt-college-forgiveness-c3ec59d4c1d89e77bc1afc6c8ded1615">Associated Press</a> reported that reinstating loans on such a large scale would be unreasonably costly and politically fraught, making such an outcome unlikely. However, it will be up to the courts to determine what to do with previously forgiven loans if the SAVE plan is ended entirely.For Smylie, the forgiveness granted by SAVE has been a godsend."It was a total shock," Smylie told BI."I teach yoga, and so it was 20 minutes before I was supposed to start to teach a class and I see this email, and I'm like, 'Wait a minute, is this serious?' And I just couldn't process it," he said. "I remember having a hard time teaching. I was just in this fun little cloud of joy. But it's one of those moments you just never think would ever come true, and then it did."<div type="image" title="Paul Smylie" height="2069" width="2758" msid="112523208" hostid="261" sizebytes="330684"></div>This relief is allowing Smylie the freedom to "have real true financial goals" with his retirement — and it's even opening the door for him to consider furthering his education. The idea of returning to school or seeking higher education in the first place has brought diverging views across generations.As BI has previously reported, many <a target="_blank" href="https://www.businessinsider.com/gen-z-value-of-college-higher-education-student-debt-tuition-2023-12">Gen Zers have chosen to forego college</a> due to high student debt loads and the availability of jobs that don't require college degrees. But for some millennials, Gen Xers, and even boomers, <a target="_blank" href="https://www.businessinsider.com/gen-xer-why-going-back-school-50s-was-worth-it-2024-5">going back to school</a> is an opportunity to advance their careers, earn more money, and give themselves a chance at trying something new — an opportunity they might not have had when they were younger. For example, a <a target="_blank" href="https://www.gallup.com/analytics/644939/state-of-higher-education.aspx">report</a> from Gallup and the Lumina Foundation found that "adults' interest in pursuing some form of higher education is at the highest level" the organizations ever recorded.Smylie's student-loan forgiveness is giving him the financial freedom to consider doing just that."It's taken a weight off of me, but it also inspired me to go back to a master's program that I had my eye on for a bit," he said.BI spoke with five financial advisors who primarily work with millennials. Each indicated that student debt remains among the top financial concerns their clients report having."There's not a lot of wiggle room in some cases as they're paying off student loans, to prioritize other short-term things or really save aggressively outside that debt," Chloe Moore, a certified financial planner who founded Financial Staples, told BI. "So having those student loans paid off really makes a difference."The advisors said most of their clients who have student loans carry between $20,000 to $100,000 in student debt, with those who pursued master's degrees and other advanced education tending to hold more than $50,000. Regardless of the degree, the advisors said their clients with student loans tend to put off other major investments — like buying a house, saving for retirement, or starting a family — until their education debt feels more manageable, which they described as a subjective measure that varies by person."The hardest thing, I think, for millennials that have any range of debt is making those tough choices between saving, paying down debt, and investing because the loans can be pretty burdening on cash flow," said Keenan Casey, a certified financial planner for Facet Wealth. "It can mean that you're making some really, really tough choices with the other aspects of your life."CiCora Leigh, 34, is all too familiar with the tough choices her student debt presented her. Leigh's educational path was unconventional — after graduating from high school in 2008, she fully funded her community-college education in Mississippi through scholarships and federal grants. However, after the death of a family member, she took a break from her education and decided to enlist in the Army with the hope that it would pay for her to eventually earn her law degree. Things didn't work out as she intended, though, and she ended up taking out about $70,000 in student loans to complete her degree at the University of Mississippi in business administration.As a single mom, Leigh felt significantly weighed down by the debt. "It was really making things tight for me and my son," she said, adding that the debt was sinking her credit score.<div type="image" title="Cicora Leigh" height="867" width="694" msid="112523206" hostid="261" sizebytes="31614"></div>All of that changed when she received a <a target="_blank" href="https://www.businessinsider.com/what-disabilities-qualify-for-student-loan-forgiveness-from-department-education-2021-3">total and permanent disability determination</a> from Veterans Affairs. In a rule first established under President Barack Obama, any student-loan borrower who can prove they are totally and permanently disabled is eligible for student-loan forgiveness. This determination can be made by the VA or a physician and includes any physical or mental impairment that inhibits employment.The VA informed Leigh of her disability status in February 2023, and just five months later, the Education Department had wiped out her $72,000 student-loan balance."It was truly a relief," Leigh said. "I was able to use those funds to start putting toward my son's college fund, and then I was able to publish my second book. That was such a relief to receive the letter. I was so happy."<h2 id="c131ac21-94ee-48b1-b9f0-49d058417940">Saving for retirement</h2>The monthly student-loan payments of nearly $500 that Beverley, 38, has been making since 2014 took a heavy toll on her finances.Beverley — who requested her last name be withheld for privacy — told BI that when she first started her career in the nonprofit sector, she was paid a very low wage and struggled to afford her monthly student-loan payments from both her undergraduate and graduate degrees on top of her other basic expenses. This led her to go into forbearance for a year to allow her to afford her everyday needs."It was really hard," Beverley said. "Paying rent, paying for monthly bills and food and everything, that basically left $100 in my bank account for anything else. It was impossible to save money."Beverley now works in the government and has been in the public sector her whole career, making her eligible for PSLF. But since she didn't start making payments until 2014, she thought she wouldn't see any student-loan forgiveness until 2024 at the earliest, assuming everything went perfectly with her paperwork.<a target="_blank" href="https://www.businessinsider.com/public-service-loan-forgiveness-program-major-overhaul-student-debt-biden-2021-10">A limited-time</a> change implemented by the Education Department in October 2021 changed that. Using a waiver that expired in October 2022, the department allowed borrowers to count payments that were previously deemed ineligible for PSLF toward forgiveness progress, including some periods in which borrowers' loans were in deferment or forbearance. That was great news for Beverley — her loans were on forbearance for a year after she graduated while she was working at the nonprofit, meaning the waiver brought her to the payment threshold for forgiveness a year ahead of schedule.On December 13 of last year, she finally received confirmation that her nearly $54,000 student-loan balance was wiped out. "Congratulations!" the letter from her servicer, reviewed by BI, said. "You have successfully met the requirements of the Public Service Loan Forgiveness (PSLF) Program and all or a portion of your loans listed below have been forgiven. Thank you for your public service."This relief not only opened up hundreds more dollars each month to make payments toward her mortgage — it finally allowed her the freedom <a target="_blank" href="https://www.businessinsider.com/student-loans-retirement-savings-employers-match-debt-payment-contributions-401k-2024-1">to put money toward retirement</a> for the first time."The thing that I'm most excited about is saving for retirement," Beverley said. "I have a lot of money that I was putting towards loans that can now go towards my future. I feel like I'm starting really late for retirement stuff, but it's better than having to pay for however many more years if I didn't get the forgiveness."Grayson Hofferber, a financial advisor and president of Millennial Wealth Management, says the cash-flow burden created by student-loan debt means many of the clients he counsels have to play catch-up for years to get on track for retirement or set up an education fund for their own children."I would say the vast amount of folks will focus on maximizing their retirement savings, whether through their 401(k) or their IRA, after paying off their student debt," Hofferber said. "For the majority of our clients, they generally will take that same kind of repayment dollar amount that they're putting toward student loans, and they'll reinvest that for their future. So they'll put that into an investment account, whether that's to buy a home or to pursue an early retirement."Though some financial advisors noted that once borrowers unlock the money earmarked to pay down debt, they also often want to celebrate."Whether it be student loans, credit-card debt, auto-loan debt, any form of debt that someone's paid off that has felt like a burden for a prolonged period of time, there is the propensity to feel like they have been sacrificing and that they want and deserve to spend the money after that point," Casey said.The financial advisors who talked to BI said that while their clients tended to be financially savvy and prone to prioritizing long-term investments, the post-student-loan splurge is a common phenomenon they see among millennials. And the splurge can take many forms — whether music festival tickets, or buying a Tesla, or taking an international vacation.While retirement is still a ways away for Beverley, she said she's grateful for Biden's changes to PSLF — and the freedom it opened up for her to make larger investments down the road."The limited waiver opportunity basically saved me a year of payments that I would still be making now," Beverley said. "So, for me, it's like keeping a promise that was made a long time ago that if we work in public service, we can have this opportunity."

Meet the millennials who got student-loan forgiveness and now have the freedom to save for retirement, grow their families, and consider going back to school

<ul><li>In <keyword id="43945" type="General" weightage="80" keywordseo="chhattisgarh" source="Orion">Chhattisgarh</keyword>, all the 100% eligible farmers have received the loan waiver. </li><li>In Telangana, a mere 5% of the 9 lakh intended beneficiaries have received, the report says. </li><li>Claim rejection by state governments, limited or low fiscal space, and change in government could be reasons for low payout. </li></ul><keyword id="59510" type="General" weightage="20" keywordseo="indian-farmers" source="Orion">Indian farmers</keyword> have been granted ten <keyword id="604781" type="General" weightage="20" keywordseo="loan-waivers" source="Orion">loan waivers</keyword> in the last eight years, but only half of the intended beneficiaries – at 37 million farmers – have received it. But like many distribution schemes, it’s not uniform across states, according to an SBI special report on agriculture. In Chhattisgarh, all the 100% beneficiaries have received the waiver, and the state which failed the most is Telangana, where a mere 5% of the 9 lakh intended beneficiaries have received, the report says. Jharkhand and Madhya Pradesh too rank among the lowest but at 13% and 12% respectively – but the payout is twice over Telangana. Status of <keyword id="6407657" type="General" weightage="20" keywordseo="farm-loan-waivers" source="Orion">farm loan waivers</keyword> since 2014 <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">State </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year of loan waiver </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% of farmers who received loan waiver (Mar 2022) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Uttar Pradesh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2017 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">52% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maharashtra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2017 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">68% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">91% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Andhra Pradesh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2014 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">92% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Karnataka </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">38% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Punjab </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Madhya Pradesh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chhattisgarh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">100% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Telangana </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2014 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jharkhand </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13% </td></tr></tbody></table> Source: SBI Research Maharashtra however is an aberration. There were two instances of <keyword id="45987" type="General" weightage="20" keywordseo="farm-loan" source="Orion">farm loan</keyword> waivers, one in 2017 and one in 2020. While the payout for the former is at 68%, the second one is at 92%. Since the waivers were announced by the state governments, political will plays a major role in distribution. “Possible reasons for low percentage could be rejection of claims by state governments, limited or low fiscal space, and change in government in subsequent years,” the report which analyzed the performance of ten farm loan waivers based on SBI &amp; ASCB data. This surge in loan waivers is entirely driven by state governments - states have announced loan waivers aggregating ₹2.5 lakh crore since 2014. Farm waivers – to accounts which have been paying on time While most farm waivers don’t reach the beneficiaries, the report also raises questions like what kind of beneficiaries it serves. For one, in seven of the nine states in the list, most of these loans waived were standard accounts – which are bank accounts in good standing and not turned into NPAs or non-performing assets. It takes three months of nonpayment to turn a loan account into an NPA, which means standard accounts are on time with their payments. In Jharkhand, Uttar Pradesh and Andhra Pradesh – farm loan waivers aided over 90% of standard accounts. Only in two states, it was lower than 50% – 46% in Karnataka and 43% in Maharashtra in its 2020 edition. “Loan waivers destroy the credit culture which may harm the farmers’ interest in the medium to long term and also squeeze the fiscal space of governments to increase productive investment in agriculture infrastructure. This indicates that farm loan waivers essentially and ultimately serve a self goal,” the report. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/crypto-exchange-gemini-lays-off-more-employees-in-2nd-round/articleshow/92971874.cms">Crypto exchange Gemini lays off more employees in 2nd round</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/hul-q1-earnings-preview-watch-out-for-volume-growth-in-q1-and-commentary-on-demand-across-rural-and-urban/slidelist/92971164.cms">HUL Q1 earnings preview – watch out for volume growth in Q1 and commentary on demand across rural and urban</a>

₹2.5 lakh crore farm loan waivers announced – half received and 80% didn't even need them

The <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword> Tuesday deferred to November 5 the hearing on a batch of pleas relating to charging of interest on interest by banks on EMIs which were not paid by the borrowers who availed of the RBI <keyword id="6840678" type="UNKNOWN" weightage="20" keywordseo="loan-moratorium">loan moratorium</keyword> scheme in view of the COVID-19 pandemic. The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> and the Finance Ministry have already filed separate additional affidavits in the apex court saying that the banks, financial and non-banking financial institutions will credit into the accounts of eligible borrowers by November 5 the difference between compound and simple interest collected on loans of up to Rs 2 crore during the <keyword id="117489" type="PERSON" weightage="20" keywordseo="moratorium">moratorium</keyword> scheme period. A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah was requested by Solicitor General Tushar Mehta that the hearing in the loan moratorium case be deferred as he would be busy arguing on behalf of the Centre in other matter relating to the Central Vista project. "These moratorium matters were listed yesterday but they came up today. I am requesting for an adjournment considering I have a case (Central Vista) where I will be arguing" the law officer said. A letter seeking deferment of the hearing in the case was also circulated by advocate-on-record Anil Katiyar for the Centre to the parties and the bench. The top court acceded to the request and adjourned the hearing on pleas including the one filed by Gajendra Sharma on November 5. The pleas pertained to charging of interest on interest by banks on EMIs which have not been paid by borrowers after availing the loan moratorium scheme of RBI during March 1 to August 31. Earlier, the RBI had filed the affidavit saying that it has asked all banks, financial and non-banking financial institutions to take "necessary actions" to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme. Prior to this, the central government had told the apex court that lenders have been asked to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the RBI's loan moratorium scheme by November 5. The government had said that the ministry has issued a scheme as per which lending institutions would credit this amount in the accounts of borrowers for the 6-month loan moratorium period which was announced following the COVID-19 pandemic situation. On October 14, the apex court had observed that the Centre should implement "as soon as possible" the interest waiver on loans of up to Rs 2 crore under the RBI's moratorium scheme and had said that the common man's Diwali is in the government's hands. The RBI had on March 27 issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1, 2020, and May 31,2020, due to the pandemic. Later, the moratorium was extended till August 31 this year. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/prajakta-koli-aka-mostlysane-advice-for-content-creators-on-the-fine-line-between-brand-collaborations-and-staying-honest-on-social-media/articleshow/79013162.cms">Prajakta Koli aka MostlySane’s advice for content creators on the fine line between brand collaborations and staying honest on social media</a> <a href="https://www.businessinsider.in/business/ecommerce/news/flipkart-acquires-gaming-startup-mech-mocha-as-it-looks-to-tap-the-social-gaming-space-for-more-consumers/articleshow/79014466.cms">Flipkart acquires gaming startup Mech Mocha as it looks to tap the social gaming space for more consumers</a> <a href="https://www.businessinsider.in/india/news/covid-19-vaccine-updates-pfizer-moderna-to-roll-out-covid-19-vaccine-by-december/articleshow/78924143.cms">COVID-19 vaccine tracker: German CureVac shows an immune response, Aspen Pharmacare and J&amp;J sign pact to make vaccine in South Africa</a>

Supreme Court verdict on loan moratorium case deferred to November 5

Mumbai, Jun 17 () Interest rate waivers for bank loans during moratorium will harm the depositors, the All India Bank Depositors' Association (AIBDA) has said adding that interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Bank depositors will be "severely hit" if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, it said. It further added that historically, the sovereign covered the loan interest waivers, but in the current situation, a shortfall in revenues both at the Centre and state level will not permit the same. Meanwhile, on June 12, the Supreme Court had asked the Centre and the Reserve Bank of India (RBI) to hold a meeting within three days to decide on waiver of interest on interest for deferred payments of instalments for loans during the moratorium period announced in wake of the coronavirus-induced lockdown. "Our query is very limited on whether there can be waiver of interest on interest," a bench of Justices Ashok Bhushan, S K Kaul and M R Shah had said, adding it will take a balanced view of the matter. The AIBDA said media reports on the Supreme Court observations have been "extremely unnerving" and added that the same prompted it to make the depositors' stance known. "We are greatly perturbed about the likely ramifications of the loan interest waiver on the banking sector, and on the prudential financial discipline of the borrowers," the association's secretary Amitha Sehgal said in the statement. The Supreme Court should dispose-off the petition, it recommended, adding that opting for interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Credit demand has also gone down and will revive as the lockdown eases, it said, adding that the depositors' money is unlikely to be used for it as the low cost funds made available by the RBI will be deployed. As the depositors' money is unlikely to be used, "there is a case for protection of depositors' interest by way of freezing the deposit rates at the pre-COVID-19 level," it said, adding it is yet to hear from the RBI on this. AA DRR DRR

Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA

<ul class="summary-list"><li>Income-based repayment plans were created in 2007 to give borrowers affordable monthly bills.</li><li>But a student-loan company worker who saw the program's creation said it was bad from the start.</li></ul>The purpose of <a href="https://www.businessinsider.com/student-loan-debt-forgiveness-income-driven-repayment-failures-gao-biden-2022-4">income-driven repayment plans</a> for <keyword id="11896050" type="UNKNOWN" weightage="60" keywordseo="student-loans" source="Orion">student loans</keyword> is in the name: Give borrowers affordable monthly payments based on the <keyword id="11899771" type="UNKNOWN" weightage="60" keywordseo="income" source="Orion">income</keyword> they're bringing home, with the promise of loan forgiveness after about 20 years.But a worker at a small student-loan company in Iowa who was there when the <keyword id="11897874" type="UNKNOWN" weightage="60" keywordseo="education-department" source="Orion">Education Department</keyword> created the income-based repayment program in 2007 told Insider it was flawed at the outset."The implementation of this plan was never the problem," said the worker, who requested to remain anonymous but whose identity is known to Insider. "It was a bad program from the very beginning."The plans allow borrowers with direct federal loans or loans through the Federal Family Education Loan program, which are privately held, to pay them down through monthly payments fixed at a percentage of their discretionary income, with forgiveness after 20 or 25 years of repayment.While the first income-driven repayment plan — known as the income-contingent repayment plan — was introduced in 1994, when President Joe <keyword id="60973" type="UNKNOWN" weightage="60" keywordseo="biden" source="Orion">Biden</keyword> took office last year <a href="https://www.businessinsider.com/student-loan-borrowers-debt-forgiven-income-driven-repayment-biden-solutions-2022-1">only 32 borrowers total</a> had received forgiveness, and interest on the loans has added a significant burden. <a href="https://www.businessinsider.com/npr-investigation-income-driven-student-loan-repayment-plans-are-failing-2022-4">Investigations</a> have described major flaws with the plans, like a failure to keep track of payments. And while the Biden administration has announced <a href="https://www.businessinsider.com/student-loan-debt-forgiveness-income-driven-repayment-failures-gao-biden-2022-4">reforms</a> to the program, the worker said the plans' failures are not getting enough attention.The worker has been employed at a nonprofit student loan company in Iowa that services private and FFEL loans for over a decade. She said President George W. Bush's Education Department gave poor guidance to companies on carrying out the plans, leading to a difficult application process that was accompanied by mounting interest on the loans."We didn't even want to tell people about loan forgiveness because we didn't want people banking on it," the worker said. "Because we knew how unlikely it would be for them to get it. People are going to accrue a lot of interest, and it's going to be really bad for them, and we really didn't want to offer it to them."<h2>'We have so many people who are having so much trouble applying'</h2>An <a href="https://www.npr.org/2022/04/01/1089750113/student-loan-debt-investigation">NPR investigation</a> into income-driven repayment plans published in April said internal documents from a 2016 review indicated three student-loan companies — Mohela, CornerStone, and the Pennsylvania Higher Education Assistance Agency — <a href="https://www.businessinsider.com/npr-investigation-income-driven-student-loan-repayment-plans-are-failing-2022-4">were not tracking borrowers' payments</a> toward the plans, meaning borrowers had to ask the companies "to do a labor-intensive records review" to determine whether they qualified for forgiveness.The student-loan company worker described a confusing paperwork process with these plans."It was just always complicated, like overly so," she said, referring to enrolling in the plans. "Believe it or not, for as much trouble as people have applying for it now, it was way worse back then. But still, we have so many people who are having so much trouble applying."Borrowers who want to enroll in an income-based repayment plan need to provide proof of income, which the worker said can be difficult, especially for borrowers who are self-employed. The worker said that if she cannot verify the borrower's gross income and frequency of pay, the borrower could be denied enrollment in a plan.She added that while the application process had become a bit simplified and condensed into one form borrowers need to fill out every year, it still leaves room for error because the form and the supporting documents require significant accuracy."It's not that hard if you see it every day — if you're really familiar with it, it's pretty simple — but this is a form people see once a year, so we don't expect them to remember it, and it's really easy to get stuck on," she said.<h2>Borrowers on income-based repayment plans can face mounting interest</h2>Student-loan borrowers are likely well aware of the impact of interest on their debt — it's <a href="https://www.businessinsider.com/stories-of-student-loan-debt-hamster-wheel-borrowers-cant-escape-2022-1">prevented</a> many from putting a dent in the original balance they borrowed.A 59-year-old man who originally borrowed about $79,000 <a href="https://www.businessinsider.com/student-debt-relief-cancelation-seniors-older-americans-loan-repayment-2021-4">told Insider last year</a> that he'd paid off $175,000 and still owed $236,485. He described it as a "debtors' prison," saying the interest accumulated had kept him in an endless cycle of repayment.Income-driven plans also involve interest. The worker said that placing people on a 25-year repayment plan didn't stop interest from growing. She said that if a borrower is late in recertifying their income, the interest will capitalize — meaning it's added to the original loan balance, so future interest grows based on that higher amount — leading to higher monthly payments.Biden's Education Department recently indicated it wants to <a href="https://www.businessinsider.com/bidens-plan-to-prevent-spiraling-interest-on-student-loan-debt-2022-7">prevent interest capitalization</a> whenever possible. While that could help borrowers starting in 2023, those who have been in repayment for decades could continue contending with higher monthly payments.<h2>Lawmakers and advocates are pushing Biden to go further on reforms</h2>In December, Biden <a href="https://www.businessinsider.com/income-driven-student-loan-debt-repayment-program-applying-easier-biden-2021-12">announced</a> reforms to income-driven repayment plans that included allowing borrowers to self-report their incomes — rather than submit tax documentation — to apply for or recertify the plans through July 31. In April, the department <a href="https://www.ed.gov/news/press-releases/department-education-announces-actions-fix-longstanding-failures-student-loan-programs">proposed</a> fixes to the plans and said it would conduct a one-time revision of past payments.However, an Education Department spokesperson told Insider on Thursday that an improved repayment plan will not be included in the upcoming regulatory proposal, and after NPR published its findings, lawmakers on both sides of the aisle urged the Education Department to take the reforms a step further.Sen. Patty Murray and Rep. Bobby Scott, the chairs of the Senate's and House's education committees, wrote a <a href="https://www.help.senate.gov/imo/media/doc/IDR%20Murray_Scott%20Letter%20to%20Secretary%20Cardona_4.16.22.pdf">letter</a> in April urging the secretary of education, Miguel Cardona, to establish a new income-driven repayment plan "that keeps payments affordable, prevents debts from ballooning over time, and provides a reliable pathway out of perpetual repayment."Also in April, 117 advocacy groups <a href="https://protectborrowers.org/wp-content/uploads/2022/04/UPDATED-IDR-Waiver-Coalition-Letter-for-Sign-On.pdf">urged</a> Cardona to create a waiver for income-driven repayment plans that would retroactively allow any payment a borrower has made to count toward loan forgiveness, among other proposals.An Education Department spokesperson told NPR at the time that the department is "aware of historical issues with prior processes that had undermined accurate tracking of eligible payments," adding, "The current situation is unacceptable and we are committed to addressing those issues."The student-loan company worker said she hopes that's the case."I think the government has a responsibility to these people, because we've done this to Gen Xers and millennials, but now we're getting a lot of Gen Z on there," she said. "And this is all these people who are getting trapped in this debt because they were told they were making the smart and the fiscally responsible decision to go on the income-based repayment plan and have a payment that matched their income. And all it's done is just lead to massive debt."

A student-loan worker who enrolled people in the first income-based debt-repayment plans says it was 'a bad program from the very beginning'

<ul><li><keyword id="12153018" type="UNKNOWN" weightage="60" keywordseo="sofi-stock" source="Orion">SoFi stock</keyword> fell 10% on Thursday after the Biden administration extended the freeze of student loan payments.</li><li>The freeze was set to expire on May 1, but has instead been pushed back to August 31.</li><li><keyword id="11898791" type="UNKNOWN" weightage="60" keywordseo="sofi" source="Orion">SoFi</keyword> said it expects an additional loan payment freeze to occur beyond August 31 as the midterm elections approach.</li></ul><a href="https://markets.businessinsider.com/stocks/sofi-stock">SoFi</a> stock fell as much as 10% on Thursday after <a href="https://www.businessinsider.com/biden-extends-student-loan-debt-payment-pause-through-august-2022-3">the Biden administration extended its freeze of student loan payments</a> to August 31.The freeze in student loan payments was set to expire on May 1. The freeze was originally implemented during the height of the COVID-19 pandemic in March of 2020, as a form of relief for consumers who were struggling economically.Due to the extension of the loan payment freeze, SoFi lowered its full-year 2022 adjusted net revenue and adjusted EBITDA guidance to $1.47 billion and $100 million, respectively. The company had originally guided for $1.57 billion and $180 million in 2022 adjusted net revenue and adjusted EBITDA.SoFi maintained its original guidance of $280-285 million adjusted net revenue and $0-5 million adjusted EBITDA for the first quarter of 2022.SoFi receives a lot of business from student loan refinancing, but that's a key product that consumers don't really need as long as the payment freeze remains in place. SoFi's student loan refinancing business has operated at less than 50% of pre-COVID levels for the past two years, according to the company.While SoFi gains new customers by helping them refinance their <keyword id="11896050" type="UNKNOWN" weightage="60" keywordseo="student-loans" source="Orion">student loans</keyword> at a lower interest rate, they are then able to upsell them to different financial services, including investment management and banking.And SoFi <a href="https://investors.sofi.com/news/news-details/2022/SoFi-Updates-2022-Annual-Guidance-to-Reflect-Latest-Extension-of-Federal-Student-Loan-Payment-Moratorium/default.aspx#:~:text=SoFi's%20updated%20Adjusted%20Net%20Revenue,billion%20and%20%24180%20million%2C%20respectively.">doesn't expect the student loan payment freeze to end</a> on August 31, given the upcoming midterm elections. "Management now expects that a number of factors including the impending fall midterm elections will precipitate a likely seventh extension beyond August 2022 by the Administration. Accordingly, Management's updated 2022 guidance assumes that the student loan moratorium will not in fact end during the course of 2022," SoFi said.<div type="image" title="SoFi stock" height="520" width="628" msid="90712553" hostid="261"></div>

You Searched For "moratorium loan interest waiver" and got 6 results

Meet the millennials who got student-loan forgiveness and now have the freedom to save for retirement, grow their families, and consider going back to school

Ayelet Sheffey,Katherine Tang…

₹2.5 lakh crore farm loan waivers announced – half received and 80% didn't even need them

Katya Naidu

Supreme Court verdict on loan moratorium case deferred to November 5

PTI

Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA

PTI

A student-loan worker who enrolled people in the first income-based debt-repayment plans says it was 'a bad program from the very beginning'

Ayelet Sheffey

SoFi drops 10% as Biden's extended student loan payment moratorium forces the company to lower earnings guidance

Matthew Fox

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