Student loan forgiveness Archives

The Trump administration moved Wednesday to end its legal fight to overhaul a popular student loan forgiveness program.

The Department of Justice appealed after federal judges ruled in June in favor of advocates who said the Public Service Loan Forgiveness program risked becoming a tool for political retribution. But it dropped two appeals Wednesday in single-sentence joint agreements, which stipulated that each side would pay its own fees.

Federal officials provided no explanation, but advocates praised the ruling.

“The Trump administration’s attempt to weaponize public service loan forgiveness against organizations it disagrees with was anti-democratic and unlawful from the start,” Dan Zibel, an attorney for the group Student Defense, said in a written statement. “This is a significant victory for millions of Americans who have dedicated their careers to public service.”

The PSLF program was designed to make jobs in government, public schools, fire and police departments, public hospitals and nonprofits more attractive by forgiving loans for qualified employees after a decade’s worth of payments. (Read more from “Trump Admin Ending Legal Fight to Overhaul Student Loan Forgiveness Program” HERE)

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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