November 2, 2023
We just got our first look at who may qualify for the President’s new federal student loan forgiveness program.
Yes – this is a new program being formulated after the supreme court struck down the last one.
But before I tell you all about it there are a few disclaimers.
Like – this is all just preliminary. Things could change and evolve. Also, while the education department is now outlining who may qualify for forgiveness they have not yet said what exactly they would qualify for. Is it full loan forgiveness, is it a certain dollar amount of forgiveness? They just haven’t disclosed that part yet. So we just don’t know.
But there are three things we do know right now.
First – yes the department of education can do this. Just because the Supreme Court struck down the last program doesn’t mean they can’t try and create a new one again. Administrations do this all the time. Now – once it’s out there – it’ll probably be challenged again in the courts and the supreme court may strike it down again. But maybe not. And there’s nothing stopping them from trying.
Second – the president directed the department of education to start working on this the same day SCOTUS struck down the last program. I have several videos detailing all of that work.
And third – the Department of Education is using the very complicated rule making process. This process takes time. We may not see a final rule until next spring. So this announcement is just one step.
One last thing before I tell you who would qualify – if you want to read all this information from the department of education – I highly suggest you follow these steps and sign yourself up for my news girl news roundup email. Because I will be emailing all of this information out to you tonight.
Now – to who would qualify under this new student loan forgiveness program.
There are four types of borrowers listed and one more that isn’t officially listed, but will likely be added.
Category one – federal loan borrowers who have outstanding federal student loan balances that exceed what they originally borrowed.
Category two – borrowers who have loans that first entered repayment 25 or more years ago.
Category three – borrowers who took out loans to attend career-training programs that created unreasonable debt loads or provided insufficient earnings for graduates, as well as borrowers who attended institutions with unacceptably high student loan default rates.
And category four – borrowers who the secretary determines are eligible for forgiveness under repayment plans like income-driven repayment or targeted relief programs like public service loan forgiveness or closed school loan discharges except they have not applied for such relief.
The other category of borrowers who could be added to this list are those who are experiencing financial hardship that the current student loan system does not currently adequately address.
Now – that last category of borrowers isn’t finalized because there are a lot of questions about how to measure “financial hardship” is it through bankruptcy? And what data would be required to prove “financial hardship.”
Now – there are two all day public meetings about all of this coming up.
The first is next week November 6 and 7 from 10 a.m .-4 p.m.
And the second meeting is happening December 11th and 12. Also from 10-4.
And if you want to watch previous meetings – they are all available through the rulmaking process and if you want links to those again — make sure you sign yourself up for the roundup because i will email them to you tonight.
Read more about the rule from Department of Education here.
