Loan forgiveness

Loan forgiveness is typically an action taken by the lender, allowing the beneficiary to refrain from fully replaying the loan, as originally agreed upon. Additionally, in certain situations, an individual can have their federal student loans forgiven, canceled, or discharged. That means they won’t need to pay back some or all of those loan(s).

While the lender can always forgive a loan at their own expense, this matter gets more complicated when politicians try to force forgiveness. The US federal government has on occasion, tried to force lenders to forgive loans, and tried to pay off private loans with tax funds. For example, Joe Biden's first student debt forgiveness scheme was found unconstitutional by the U.S. Supreme Court.

See also

• Loan forgiveness based on race