Biden’s Debt Relief Program’s U.S. Department of Education Revised Its Guidelines For Which Qualify Borrowers
The American Department of Education is stumbling around. The criteria for eligibility for President Joe Biden’s student debt relief plan have recently undergone changes. The modification affects borrowers who obtained federal student loans a number of years ago, claims NPR. Perkins loans and Federal Family Education Loans (FFEL) are included in this.
According to reports, the website of the FFEL department informed debtors that they may combine these loans into federal Direct Loans and so be eligible for relief under Biden’s debt cancellation scheme. The department, however, covertly amended that wording.
The recent guidance says, “As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.”
800,000 borrowers could potentially be affected by this adjustment. It is still unknown why the agency changed its mind about FFEL borrowers who consolidate their loans with commercially held loans being eligible for debt relief.
JUST IN: In a remarkable reversal that will affect the fortunes of millions of student loan borrowers, the U.S. Department of Education quietly changed its rules on who is eligible for President Biden's comprehensive student debt relief program. https://t.co/Hsg5CSkBII
— NPR (@NPR) September 29, 2022
The department official told NPR in a statement: “Our goal is to provide relief to as many eligible borrowers as quickly and easily as possible, and this will allow us to achieve that goal while we continue to explore additional legally-available options to provide relief to borrowers with privately owned FFEL loans and Perkins loans, including whether FFEL borrowers could receive one-time debt relief without needing to consolidate.” It continued, “Borrowers with privately held federal student loans who applied to consolidate their loans into Direct Loans before September 29, 2022 will obtain one-time debt relief. The FFEL program is now defunct and only a small percentage of borrowers have FFEL loans.”
