Biden Admin Quietly Makes Reversal on Student Loan Forgiveness Program

The Biden administration quietly issued an update to its student loan forgiveness plan on Sept. 29, drastically scaling back eligibility, on the same day that six Republican-led states filed a lawsuit against President Joe Biden, claiming his student loan forgiveness plan is illegal.

As of Sept. 29, borrowers who have federal student loans that are owned by private entities and not by the Department of Education will no longer qualify for the relief program.

Previously, the administration had said those borrowers with student loans owned by private entities, many of which were made under the former Federal Family Education Loan (FFEL) program and Federal Perkins Loan program, would qualify for relief of up to $10,000 or $20,000 in loan forgiveness, as long as the borrower consolidated his or her debt into the federal Direct Loan program.

The guidance now states, “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.”

More than 4 million student loan borrowers have privately held loans through the FFEL Program, according to NPR. (Read more from “Biden Admin Quietly Makes Reversal on Student Loan Forgiveness Program” HERE)

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