Joe Biden Lets Down Some of his Fans, as Guidelines Quietly Change as to Who is Eligible for Student Loan Relief, Excluding Many

On Thursday, the U.S. Department of Education updated the guidance for Biden’s student loan forgiveness. As of September 29th loans that were originally available to be forgiven, are no longer so.

The updated website now reads, “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.”

This means those who took out Perkins and Federal Family Education Loans, issued and managed by private banks (FFEL a program that ended in 2010) are going to be affected by this move.

According to a Biden Administration official, FFEL borrowers can still qualify as they have Direct Loans, however, according to NPR that detail isn’t included in the updated guidance. The official also said that the change will affect around 800,000 borrowers. A much lower number than NPR’s projected 4 million.

U.S. Department of Education issued a statement about the change to NPR:

“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. 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.”

According to legal experts, the change seems to have been made to avoid lawsuits from private banks who could argue the debt relief would harm them financially. They would no longer be collecting the interest on the loans.

The lawsuit filed by six states Thursday alleges this already, “The consolidation of MOHELA’s FFELP loans harms the entity by depriving it of an asset (the FFELP loans themselves) that it currently owns. The consolidation of MOHELA’s FFELP loans harms the entity by depriving it of the ongoing interest payments that those loans generate.”

Many are unhappy with how debt forgiveness has been rolled out. Colleges are off the hook and can continue to overcharge for admission to their campuses. Those who never went to school or already paid off their loans are out of luck with any debt relief, which will likely add to the national debt.

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