July 18, 2023
The Department of Education took a big step today in the very looooooong process federal student loan forgiveness.
Is this about the forgiveness you talked about last week for 800,000 borrowers who had their payments miscalculated.
No.
Is this about the save income driven repayment program?
No.
Well then what is this about?
This is the proposal the President announced just hours after the Supreme Court struck down his first student loan forgiveness plan. I told you about that announcement in this video a few weeks ago and at the time we just didn’t have many details about what the plan would look like, who would qualify and how it would work.
What we do know is — the President wants to use the power given to the Education Secretary under the 1965 Higher Education Act to “compromise, waive or release federal student loans.”
So today was the first big step in turning that proposal into a reality through what’s called the “rule making” process. Today’ the Department of Education took the step of having the first public hearing.
For about five hours today, I watched as officials from the Department of Education heard from current students with loans, former students paying on those loans, parents and of course those who do not think the federal government should be forgiving any loans.
Those in favor suggested several things this new forgiveness program should included; getting rid of the capitalized interest, reducing the interest rate on the loan, restructuring the way interest is calculated. They also suggested the department revamp its entire repayment program and do a better job of educating potential borrowers about what exactly they’re getting in to when they take this loan out. Of course there were others who said the President needed to just simply wipe out student debt all together.
Now – it’s going to be at least a year before we know more about what comes of this new rule but you still have time to make sure the government knows what you think. The deadline to submit your comment is July 20, 2023.
Here’s the link to comment on the new student loan forgiveness program.
