The plan to forgive a portion of student loan debt is facing legal challenges, forcing changes to eligibility for the upcoming program. In August, the Department of Education (ED) announced $10,000 would be forgiven in federal student loans. This originally included Federal Family Education Loans (FFELs), which are issued by private banks but guaranteed by the U.S. government. These loans could have been consolidated into Direct loans and still qualify but as of September 29, 2022, this is no longer possible.
"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," a spokesman for the Education Department told Reuters.
From the last official count, roughly 4 million student loan borrowers owe money to an FFEL loan. The administration estimates that this change will affect approximately 770,000 borrowers. The deadline to apply for this aid is December 31, 2023. Visit studentaid.gov/debt-relief-announcement for more information. As of Oct 17, 2022, you can apply for student debt relief at https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info .
Borrowers who are employed by non-profits, military, or federal, state, Tribal, or local government may be eligible to have all their student loans forgiven through the Public Service Loans Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSFL program. These temporary changes expire on October 31, 2022. For more information, go to PSLF.gov.
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