Piecemeal Student Loan Debt Relief Not Enough!
Student loan debt relief is a big first step to financial freedom but these “piecemeal” fixes are not good enough. I believe a real commitment would be sweeping student loan debt abatement…wenston DeSue
As President Joe Biden continues to look closely at the pros and cons of officially canceling a significant chunk of student loan debt, the Education Department Tuesday announced changes to a pair of student loan programs that should offer at least some relief for millions of borrowers.
Fixes to the Public Service Loan Forgiveness and Income-Driven Repayment Plans are expected to provide immediate loan forgiveness to about 40,000 borrowers and partial relief to another 3.6 million.
That partial relief is significant. It’s projected to eliminate about three years’ worth of payments.
“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” Education Secretary Miguel Cardona said in a statement.
The changes stem from a review of the Federal Student Aid office that showed that borrowers facing financial hardships were not being given clear instructions on what options were available to them to help them stave off falling into delinquency and instead were simply placed into forbearance, even when monthly payments under income-driven repayment plans could have dropped their payments all the way to zero, according to the Education Department.
In an effort to fix the issue, one-time account adjustments will be undertaken by the Education Department that will allow certain long-term forbearances to count towards income-driven and public service-related forgiveness.
The changes will apply to borrowers’ accounts automatically before the end of the year.
Likewise, borrowers in shorter-term forbearances will be allowed to have their accounts reviewed, and account servicers will now operate under greater oversight in conjunction with the Consumer Financial Protection Bureau when it comes to placing borrowers into forbearance.
Income-driven repayments will also receive a one-time revision after the department found “significant flaws” in the system that were hindering the ability of borrowers to make progress towards paying off their loans.
Currently, federal student loan payments remain paused by the Biden administration through August 31 as the President mulls further cancellation of student loan debt.
Real Estate
Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker. Real estate is the business of exchange and affects every person on the planet. Real estate on all levels represents resources, access and ultimately, power. Knowledge is power…
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