By COLLIN Binkley
The Biden administration has temporarily relaxed the rules for the student loan cancellation program, which has been criticized for its infamous complex demands. This change could help alleviate the debt of thousands of teachers, social workers, the military and other public servants.
The Education Department said on Wednesday it would withdraw some of the more stringent requirements for public loan licensing, a program launched in 2007 to bring more college graduates into the public service, but since then only 5,500. Helped borrowers cancel loans.
Congress created a program to reward students of public affairs. As long as they paid off a federal student loan for 10 years, the program promised to wipe out the rest.
However, over 90% of the applicants were rejected. After making a 10-year payment, many borrowers have noticed that they don’t have the right type of federal loan or repayment plan to qualify for the program. Thousands of people were in debt that they thought was liquidated.
Due to a temporary change, these borrowers can cancel the loan.
Until October 2022, borrowers who have worked for 10 years in a skilled job are eligible for loan relief regardless of what type of federal loan or repayment plan they have. Previously ineligible loan repayments are counted and some borrowers are approaching the finish line.
According to the agency, the change will allow 22,000 borrowers to immediately cancel their loans, and if past payments are proven, another 27,000 could be eligible. In total, more than 550,000 borrowers will move closer to forgiveness, officials said.
“A borrower who devotes his ten-year life to public services should be able to count on the promise of a public service loan forgiveness,” Education Secretary Miguel Cardona said. “The system has failed to deliver on this promise so far, but it is changing for many borrowers.”
This is particularly beneficial to federal borrowers of family education loans from an outdated loan program that has issued federally guaranteed loans through banks. Loans for the program which ended in 2010 were previously excluded, but can now be canceled with updated rules.
Among other changes, the department will allow members of the armed forces to count active hours for 10 years, even if payments are suspended during that period.
And starting next year, the department will automatically count payments from federal workers and military personnel for the required decade. Existing rules require applicants to ask to be authenticated for payment.
The changes are considered short-term changes while government agencies consider permanent improvements through the federal rule-making process. The department began holding hearings this week in a process that could revolutionize federal student aid programs, including public service benefits.
Defenders welcomed the temporary change. Aaron Ament, president of Student Defense, a legal group that has represented students who have brought lawsuits against the program, called it a “big step in the right direction.”
Randi Weingarten, president of the American Federation of Teachers, said the change was welcome.
“Today we all sighed in relief when the Kafkaesque system, which shattered the dreams of so many people, finally began to be dismantled,” she said.
The program was a source of bipartisan contempt – Democrats and Republicans agreed the program was flawed and needed updating. But Republicans have said the Education Department has gone beyond its authority by changing the programs created by Congress.
Virginia Foxx, a leading Republican member of the House of Education, said President Joe Biden’s administration “is bypassing Parliament with administrative measures.”
“We agree that this program is in desperate need of reform, but such reform requires action from Congress and with us to change the federal loan and repayment program. We encourage you to work together, ”Fox said in a letter to Cardona.
This is the last of a few attempts to fix the program. In 2018, Congress got $ 700 million to temporarily extend its benefits to all types of loans and payment programs, but a year later most requests were still being rejected.
According to reports from the Government Accountability Office, President Donald Trump’s administration has created a “confusing and inefficient” process, and borrowers have often been disqualified for unnoticed rules.
In June, a report from the Department of Education highlighted the program’s shortcomings, which “created a lot of confusion and frustration” while only allowing 5,500 borrowers to lend.
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