Biden Administration Shifts Loan Eligibility Requirements Amid Opening Forgiveness Applications
The Biden administration has quietly altered student loan forgiveness eligibility, stating that Federal Family Education Loan (FFEL) program and Perkins Loans that are not consolidated into direct loans by Thursday will be ineligible for forgiveness.
This shift is a major one as the Department of Education makes final preparations to open applications for the debt relief.
The Biden administration is canceling $10,000 in student debt for individuals earning less than $125,000 or households earning less than $250,000 in income. Recipients of the Pell Grant, awarded to students and families with lower income, may have an additional $10,000 forgiven.
However, borrowers with student loans through the Federal Family Education Loan (FFEL) program and Perkins Loans who have not consolidated their debt into direct loans or applied to consolidate by Thursday will not be eligible for federal debt relief, according to the Education Department.
While these loan programs are federally guaranteed, they are held by private institutions, and the Education Department "is assessing whether there are alternative pathways to provide relief to borrowers with federal student loans not held by ED, including FFEL Program loans and Perkins Loans, and is discussing this with private lenders," the department says on its website.
According to the administration, applications for relief can be submitted next year, but they are encouraging borrowers to apply for forgiveness by November 15, 2022 to ensure their relief comes before January 1, 2023 when student loan payments resume after a pause since the onset of the COVID-19 pandemic in 2020.
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