Biden administration narrows eligibility for student debt cancellation

30 September, 2022
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Biden administration narrows eligibility for student debt cancellation

Hundreds of thousands of borrowers could be shut out of the student debt relief promised by President Biden after the Education Department announced Thursday that privately held loans will not be forgiven.

The department had said it was assessing whether to offer some debt relief to borrowers with federal student loans held by private entities. In the meantime, it had advised borrowers with Federal Family Education Loans (FFEL) or Perkins Loans that they could consolidate their debt into the federal Direct Loan program to qualify for relief, and had until the end of 2023 to do so.

But the department changed its guidance on Thursday, saying that only borrowers who had applied to consolidate into the Direct Loan program by that day would be eligible for the broad relief program.

An administration official said Thursday that the change could affect about 770,000 borrowers, but some earlier estimates had pegged the number higher.


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