The Biden administration has changed its leadership remove some student loans from eligibility for forgiveness, a major turnaround as the Department of Education finalizes preparations to begin applications for debt relief.
Starting Thursday, borrowers with student loans through the Federal Family Education Loan (FFEL) and Perkins Loans program who have not yet consolidated their debt into Direct Loans will no longer be able to do so and no longer qualify for federal debt forgiveness, the Department of Education now says. These programs, although federally guaranteed, are held by private institutions. Borrowers with FFEL and Perkins loans who applied for consolidation in the Direct Loan program before Thursday are still eligible for debt relief.
At this time, the Department of Education is “assessing and discussing with private lenders whether there are alternative ways to provide relief to non-ED federal student loan borrowers, including FFEL loans and Perkins loans,” the department says on its website.
The ministry did not explain the reason for the change, which occurred on the same day six GOP-led states sued the Biden administration over student debt relief. Biden administration cancels $10,000 in student debt for those earning less than $125,000 or households with an income of less than $250,000, while Pell Grant recipients who come from less affluent families can have an additional $10,000 forgiven.
The administration’s justification for debt relief depends on the period after September. 11, 2001, a law that the White House says allows it to act in times of national emergency, which in this case was the COVID-19 pandemic. Plaintiffs in the GOP lawsuit cite CBS News “60 Minutes” interview. in which President Biden said the pandemic was “over”.
Borrowers can still apply for debt relief, but the administration is urging them to apply by Nov. 15 so they can get debt relief before Jan. 1, 2023, when borrowers will have to resume student loan payments. Since the beginning of the pandemic in 2020, they did not have to pay.
Debtors will still be able to apply for debt relief until 2023, according to the White House.