The Biden administration has proposed sweeping changes to student loan forgiveness programs that would cut red tape that currently stands in the way of debt cancellation for some borrowers.
“If a borrower qualifies for student loan relief, it shouldn’t take mountains of paperwork or a law degree to get it,” Education Secretary Miguel Cardona said in a statement Wednesday. “Nor should student loan benefits be so difficult to obtain that borrowers never take advantage of them.”
The proposed changes, which the Department of Education hopes to finalize later this year, would make it easier for those already eligible for existing programs to get debt relief.
For example, the Department of Education will begin processing claims in groups instead of individually under the borrower protection program, which is designed for students who believe their college has lied to them or taken advantage of them.
TENNESSEE COLLEGE GOES REMOTE ON FRIDAY TO SAVE STUDENTS GAS MONEY
The Public Service Loan Forgiveness Program, which allows government and nonprofit employees to have their loans forgiven after making 120 monthly payments, will also be overhauled.
Workers in eligible jobs currently have to follow strict rules, such as making full payment within 15 days of the due date. The new rules will remove the 15-day requirement.
“Whether it’s closing school discharges, borrower protection claims, PSLF, or total and permanent disability relief, borrowers have had to navigate narrow rules and an unnecessarily complex system,” said James Quall, Deputy Secretary of Education, in a statement on Wednesday.
“The regulations we proposed today will remove many of these barriers and help create a federal student loan system that works better for borrowers,” Quall added.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Biden announced two rounds of student loan forgiveness last month worth about $12 billion, mostly for students who attended for-profit colleges.
The president has so far resisted calls from the progressive wing of his party to cancel up to $50,000 of student loan debt for each borrower, but the Washington Post reported in May that he was considering smaller, more targeted student debt cancellations.
The Associated Press contributed to this report.
Add Comment