ED Begins Notifying Borrowers of Potential Student Loan Forgiveness
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED) on Thursday will begin a planned email communication to federal student loan borrowers detailing the department’s next steps to provide additional student loan debt relief, which is currently being finalized through the rulemaking process.
In the announcement, ED said it will begin notifying borrowers with at least one outstanding federally held student loan, via email, with updates on potential student loan forgiveness. However, even if a borrower does receive an email from ED, it does not guarantee that the borrower will be eligible for forgiveness. ED said it will provide more information to borrowers once the rules on student loan forgiveness are finalized.
In April, ED published its first set of draft rules to provide student loan debt relief with specific provisions on who would be eligible for relief. Those proposals include automatic forgiveness for borrowers whose loans currently exceed what they owed upon starting repayment, up to a maximum of $20,000, forgiveness for borrowers who entered repayment at least 20 years ago, and more. ED said in April that it was aiming to finalize these rules in time to start providing forgiveness to borrowers this fall.
The drafted rules are part of negotiated rulemaking sessions focused on student debt relief, which were completed in February.
However, ED has yet to release draft rules for borrowers experiencing “hardship,” though the negotiated rulemaking committee did reach consensus on this topic in February. In April, ED said it would release another draft rule focused on providing relief for borrowers experiencing “hardship” in the “coming months.”
If a borrower does not want to receive the forgiveness, they have until August 30 to call their loan servicer to opt out. For those who do opt out, ED clarified they will not be able to opt back in. Those borrowers will also be temporarily opted out of forgiveness due to enrollment in an income-driven repayment plan until ED is able to automatically assess their eligibility in a few months, the department wrote.
Additionally, ED specified that borrowers would only be eligible for loan forgiveness if they have entered repayment at the time that ED determines their eligibility, which is after the proposed rules are finalized.
Education Secretary Miguel Cardona said in a statement that Wednesday’s announcement “takes another step forward in our drive to deliver student debt relief to borrowers who’ve been failed by a broken system.”
“These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others,” Cardona said in a statement. “The Biden-Harris administration made a commitment to deliver student debt relief to as many borrowers as possible as quickly as possible, and today, as we near the end of a lengthy rulemaking process, we’re one step closer to keeping that promise.”
Rep. Virginia Foxx (R-N.C.), chairwoman of the House Committee on Education and the Workforce, criticized Wednesday’s announcement, claiming that the drafted debt relief rules are an illegal scheme.
“The Biden-Harris administration continues to dangle loan ‘forgiveness’ in front of millions of borrowers across the nation,” Foxx said in a statement. “It will do nothing to address the student loan disaster that Biden-Harris has exacerbated. Overpromising and under delivering is an undeniable hallmark of this administration.”
ED estimates that if the rules are finalized as proposed, it would bring the total number of borrowers eligible for student loan debt relief to over 30 million, including borrowers who have already been approved for debt cancellation by ED over the past three years.
Publication Date: 8/1/2024
Michelle L | 8/1/2024 1:34:25 PM
As an administrator and a loan holder, this is nothing short of disaster! Pay your loans, no wait everything is forgiven, pay your loans, wait, change your servicer, wait you're in forbearance, no wait, your payment is now decreased, Just kidding, it's not, but you're still on a forbearance, oh but wait this won't count towards your loan forgiveness, did you sign up for this plan? This is a JOKE!! An awful, disgusting, cruel joke and you expect us as administrators to explain it to students? Come on! If anyone needs forgiveness it's those that work in financial aid that have to deal with all your crazy shenanigans!
Fawn L | 8/1/2024 10:45:17 AM
Please abort mission ! Additionally, ED specified that borrowers would only be eligible for loan forgiveness if they have entered repayment at the time that ED determines their eligibility, which is after the proposed rules are finalized.
what does that even mean. I do not get overtime to explain all your emails and confusing rules. Please wait until it is final!
Jeff A | 8/1/2024 10:31:06 AM
Darren,
You are correct. However, students are just pawns.
Whether loans are forgiven or not is of no consequence.
Either they get the loans forgiven (vote for us), or
The promise is taken away by 'them' (don't vote for them,).
Darren C | 8/1/2024 10:24:13 AM
This is completely irresponsible and misleading by the administration. Last time there was a “promised” student loan forgiveness, I believe 18 million borrowers were “approved” for a percentage of loan forgiveness. It was unsurprisingly not approved and shut down by SCOTUS.
By providing empty promises in regard to personal student loan debt, this created confusion, anger, and division. Now there is going to be notification of “potential” student loan forgiveness sent out to millions of borrowers. Has nothing been learned from previous failures? These last few years have been such an abuse of the student loan system, and those hurt the most are the student’s themselves and institutions jumping through hoops trying to keep up with this debacle of an education system.
Jeff A | 8/1/2024 9:45:14 AM
Need to get this promise out there to 25mm before early voting begins.
You must be logged in to comment on this page.