These two types of student loans are not eligible for forgiveness, according to new guidelines
The Biden administration has changed its guidelines to remove some student loans from eligibility for forgiveness, a major reversal as the Department of Education makes final preparations to launch applications for debt relief.
Starting Thursday, borrowers with student loans under the Federal Family Education Loans (FFEL) program and Perkins loans who have not yet consolidated their debt into direct loans will no longer be able to do so and will not will be more eligible for federal debt relief, the Department of Education now says. These programs, although guaranteed by the federal government, are held by private institutions. Borrowers with FFEL and Perkins loans who applied to consolidate into the direct lending program before Thursday are still eligible for debt relief.
At this point, the Department of Education is “evaluating whether there are other avenues to relieve borrowers with federal student loans not held by ED, including FFEL program loans and Perkins loans, and in is discussing with private lenders,” the department said. its website.
The ministry did not explain the reason for the change, which came on the same day ason student debt relief. The Biden Administration for those earning less than $125,000 or households with incomes below $250,000, while Pell Grant recipients, who come from less well-off families, can be forgiven an additional $10,000.
The administration’s rationale for debt relief hinges on a post-September. 11, 2001, legislation which the White House says allows it to act during times of national emergency, which in this case was the COVID-19 pandemic. Plaintiffs in GOP lawsuit cite CBS Newsin which President Biden declared the pandemic to be “over”.
Borrowers can still apply for debt relief, but the administration encourages them to do so before November 15, so they can get relief before January 1, 2023, when borrowers will be required to resume debt. student loan repayments. They haven’t had to make a payment since the pandemic began in 2020.
According to the White House, borrowers will still be able to seek debt relief until 2023.