The Biden administration has changed its guidelines to eliminate some student loans from eligibility for forgiveness, a major reversal as the Department of Education makes final preparations to begin applications for debt relief.
Starting Thursday, borrowers with student loans through the Federal Family Education Loan (FFEL) program and Perkins loans who have not already consolidated their debt into Direct Loans will no longer be able to do so and are no longer eligible for federal debt relief . says the Ministry of Education now. These programs, although federally guaranteed, are maintained by private foundations. Borrowers with FFEL and Perkins loans who applied for consolidation in the Direct Loan program before Thursday are still eligible for debt relief.
At this point, the Department of Education is “assessing whether there are alternative avenues to provide relief to borrowers with federal student loans not held by ED, including FFEL program loans and Perkins loans, and discussing this with private lenders,” says the department on its website.
The department has not explained the reason for the change, which came on the same day six GOP-led states sued the Biden administration for student debt relief. The Biden administration cancels $10,000 in student debt; for those earning less than $125,000 or for households with an income of less than $250,000, while Pell grant recipients from less affluent families may be forgiven an additional $10,000.
The administration’s justification for debt relief depends on a post-Sept. 11, 2001, law that the White House says allows him to act in a time of national emergency, which in this case was the COVID-19 pandemic. The plaintiffs in the GOP lawsuit cite a CBS News Interview on “60 Minutes”. in which President Biden said the pandemic was “over.”
Borrowers can still apply for debt relief, but the administration encourages them to apply by Nov. 15 so they can get relief before Jan. 1, 2023, when borrowers will be required to resume student loan payments. They have not had to pay since the beginning of the pandemic in 2020.
Borrowers will be able to apply for debt relief until 2023, according to the White House.