New guidelines issued by the Department of Education disqualify previously eligible individuals from President Joe Biden’s student debt relief program.
It is not yet clear how many people were affected by this change.
Biden announced the plan in August, promising borrowers earning less than $125,000 a year, or married couples making less than $250,000 a year, to be forgiven up to $10,000 in debt. The program also allows Pell grant recipients to receive debt forgiveness of up to $20,000.
The Department of Education estimates that Biden’s plan will cost him $30 billion a year over the next decade.
Under the plan’s original guidelines, more than 40 million borrowers were eligible for the waiver. The ministry estimates that 81% of eligible people participate in relief programs.
of new guidelines“People in States with Federal Student Loans Held by Departments,” published Sept. 29.You cannot get one-time debt relief by consolidating these loans directly into your loan. ”
This change affects takeout individuals Perkins Loans and Federal Home Education Loans. It is federally insured but issued and managed by a private bank. Although the FFEL program ended in 2010, over 4 million individuals are still in debt with FFEL loans. The Biden administration had previously advised FFEL owners that they could consolidate their loans into federal direct loans and qualify for the forgiveness plan.
“The ED is evaluating whether there are alternative channels for providing relief to borrowers with federal student loans not held by the ED, including the FFEL Program Loan and the Perkins Loan, and is discussing this with private lenders. increase.
According to a report from NPRAs many as 800,000 people are no longer eligible for the student debt forgiveness plan, the outlet said earlier guidelines said private banks that administer FFEL loans would not be able to do so if the plan would result in financial harm. It reportedly potentially allowed the Biden administration to sue the Biden administration for causing
The federal government did not announce the changes before the revised version was published online.Applications for the Student Loan Debt Forgiveness Program will be available online OctoberAmericans interested in participating must apply by December 31, 2023.
Next
