The Biden administration introduces an additional plan for student loan relief.
Thank you for reading this post, don't forget to subscribe!The Biden administration proposes another student loan relief plan at 02:15.
New York — The Biden administration is suggesting a new plan for student loan relief that would benefit individuals who are ineligible for loan forgiveness under the current temporary program.
“This is essentially another measure taken by the administration to extend student loan forgiveness to a large number of student borrowers, many of whom have been struggling for years to repay their outstanding loans,” said Bruce McCleary of the National Foundation for Credit Counseling.
The Department of Education has released a proposal for student loan relief addressing four categories of borrowers:
- Individuals with a federal student loan balance that exceeds the original amount borrowed.
- Those who repaid their loans 25 years ago or more.
- People who obtained loans for career training programs, resulting in “excessive debt burden or inadequate earnings.”
- Those eligible for waivers under other repayment plans but have yet to apply.
This assistance will build upon the $127 billion in loan forgiveness already approved by the administration for approximately 4.6 million borrowers. Notifications for these borrowers’ second phase were issued in the past few weeks.
McCleary, a former debt collector, emphasizes the importance of closely monitoring debt accounts for individuals who owe money. He also urges individuals to ensure that their contact information is up to date.
“It is particularly crucial at this time,” McCleary said, “because we have just emerged from a long period of administrative pause during which people were able to defer payments. It’s one of those situations where if it’s out of sight, it’s out of mind. If your loan servicer cannot reach you, you may miss important information, such as whether you are eligible for forgiveness through the new program.”
Another tip—beware of scams, even if the email appears to be from the Department of Education or your loan provider.
“Instead of responding directly to emails, you should contact your service provider through a pre-verified authentic method or visit their website directly,” McClary advised.
The latest proposal is narrower in scope compared to last year’s plan, but the specific details regarding how borrowers could benefit from the proposal are still being finalized.
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