Millions No Longer Eligible For Student Loan Forgiveness
This latest change affects borrowers with Federal Perkins Loans and Federal Family Education Loan (FFEL) — guaranteed by the government but held by private lenders — with them no longer eligible for debt forgiveness.
(Jemal Countess via Getty Images for We, The 45 Million)
The Biden administration quietly updated its guidelines for its student debt relief plan saying those with private loans will no longer qualify for forgiveness. The change comes as six Republican-led states sued President Joe Biden claiming he has no right to unilaterally forgive student debt.
This latest change affects borrowers with Federal Perkins Loans and Federal Family Education Loan (FFEL) — guaranteed by the government but held by private lenders — with them no longer eligible for debt forgiveness. According to Student Borrower Protection Center, “There are approximately eight million borrowers who owe commercially held FFELP loans or Perkins loans. Together, these borrowers owe an estimated $175 billion of student debt.”
The Dept. of Education site has also been updated to reflect the reversal.
In August, the department announced that the administration would forgive up to $20,000 in federal student loan debt. Since then, several lawsuits have been filed stating that the Higher Education Loan Authority of the State of Missouri, known as MOHELA would be denied revenue.