The president’s plan to forgive tens of billions in student loan debt has been blocked, but the administration has still managed to cancel billions in debt through other relief programs.Some planned changes, however, could make it easier for future borrowers to find relief.Those changes depend on whether an administration friendly to borrowers remains in the White House.he administration has still managed to cancel billions in debt through other relief programs.The complexity of paying student loans starts early: The federal government offers a grace period of six months to fresh college graduates in which they’re free to skip their payments, similar to the student loan moratorium, as they establish themselves in the world. The price of that postponement, however, at least until now, was that interest kept growing on that debt. The feds then capitalize the unpaid interest, that is, they add it to borrowers’ principal balance. At that point, the loan is often larger than what a borrower first took out. The federal government also has capitalized interest after borrowers paused their loan payments.The Education Department estimated it charged nearly $22 billion in interest capitalization in fiscal year 2019 alone. (No new interest has been charged on federal student loans since March 2020 thanks to a pause on student loan payments because of the pandemic.) “It accelerates balance growth and it’s really confusing,” said Sarah Sattelmeyer, a project…
With student loan forgiveness stuck in courts, here’s how Feds are still erasing debt
