As the Department of Education finalizes its plans to begin accepting applications for debt relief, the Biden administration, in a significant reversal, modified its advice to remove some student loans from qualifying for forgiveness.
According to the Education Department, as of Thursday, borrowers having student loans through the Federal Family Education Loan (FFEL) program and Perkins Loans who haven’t already consolidated their debt into direct loans won’t be able to do so and will no longer be qualified for federal debt relief. Despite being federally guaranteed, those programs are held by private institutions. Debt relief is still available to borrowers with FFEL and Perkins Loans who applied to consolidate in the direct loan program before Thursday.
At this point, 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.
Six Republican-led states filed a lawsuit against the Biden administration for student debt relief on the same day the department made a change without providing an explanation. For households with incomes under $250,000 or individuals earning less than $125,000, the Biden administration is cancelling $10,000 in student debt. Pell Grant recipients who come from less affluent homes may also be eligible for an extra $10,000 in debt cancellation.
The White House claims that a legislation passed after the terrorist attacks of September 11, 2001, which permits it to take action in response to a national emergency—in this case, the COVID-19 pandemic—is the foundation for the administration’s reasoning for the debt relief.
President Biden stated that the pandemic is “60 Minutes” in an interview with CBS News’ “over.” It is cited by the plaintiffs in the GOP case.
Borrowers may still apply for the debt relief, but the government urges them to do so by November 15 in order to get relief before they must start making student loan payments again on January 1, 2023. Since the pandemic began in 2020, they haven’t had to make a payment.
Borrowers will still be allowed to request for debt relief up to 2023, according to the White House.