Contrary to infomercials, commercials and advertisements appearing online and in the media, there is no such thing as “Obama student loan forgiveness.” It is a fabrication that exploits the desperation of borrowers who are struggling to repay their student loans. The businesses who promote this myth may be trying to convince borrowers to pay a fee for services they could obtain on their own for free.
The most common version of this myth claims that up to $45,000 in federal student loan debt will be cancelled after 20 years in repayment, provided that the borrower has repaid at least 10% of his or her student loan balance. Some versions of the myth require the borrower to have graduated from college. Other versions claim that private student loans may also be forgiven.
This “Obama Student Loan Forgiveness” myth is based on a distortion of three existing loan forgiveness programs and various budget proposals.
None of these loan forgiveness options are called “Obama Student Loan Forgiveness.”
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