The Biden administration has changed its management exclude some student loans from eligibility for forgiveness, a major reversal as the Department of Education makes final preparations to launch applications for debt relief.
As of Thursday, borrowers with student loans through Federal Family Education Loan (FFEL) Program. and Perkins Credits The Department of Education now says those who have not yet consolidated their debt into Direct Loans will no longer be able to do so and are no longer eligible for federal debt relief. These programs, although federally guaranteed, are run by private institutions. Borrowers with FFEL and Perkins Loans who applied for consolidation in the Direct Loan Program by Thursday are still eligible for debt relief.
For now, the Department of Education is “assessing and discussing with private lenders whether there are alternative ways to assist borrowers with federal student loans outside of ED, including FFEL loans and Perkins loans,” the department said in a statement. his website.
The department did not explain the reason for the change, which took place on the same day six GOP-led states sued the Biden administration over student debt collection. The Biden administration cancels $10,000 in student debt for those earning less than $125,000 or for families with incomes less than $250,000, while Pell Grant recipients from less affluent families can be forgiven an additional $10,000.
The administration’s rationale for debt relief hinges on what post-Sept. 11, 2001, a law that the White House says allows him to act during a national emergency, which in this case was the COVID-19 pandemic. Plaintiffs in the GOP lawsuit cite CBS News 60 Minutes interview. in which President Biden said the pandemic was “over.”
Borrowers can still apply for debt relief, but the administration recommends they apply by Nov. 15 so they can receive help by Jan. 1, 2023, when borrowers must resume paying their student loans. They have not had to pay since the start of the pandemic in 2020.
Borrowers will still be able to apply for debt relief through 2023, according to the White House.
https://www.cbsnews.com/news/student-loan-forgiveness-eligibility-guidance-update/
