MEMPHIS, Tenn. — The Biden administration is now scaling back eligibility for its student loan forgiveness plan.
It will mean privately held federal student loans must have been consolidated before September 29th in order to be eligible for debt relief.
In a move that likely surprised many, the Education Department quietly changed its guidance Thursday about which loans are eligible for President Joe Biden’s student relief program, a program that had excited students.
I”t’s still kind of surprising because I was depending on one thing, and this came up, and this is a deal breaker for me,” said Chelsie Edwards.
The reverse comes after the Biden administration had recently touted the new program.
“The bottom line is this, the President made a commitment during the campaign to $10,000,” said, Miguel Cardona, the U.S. Secretary of Education. “He upped the ante to 20 for those, focusing on addressing inequities that we know were made worse by the pandemic, and now we have to deliver on that promise.”
The new guidelines published on the Education Department’s website on Thursday say borrowers with federal student loans not held by the department “cannot obtain one-time debt relief by consolidating those loans into Direct Loans.”
The website said that only borrowers who had applied for consolidation of Family Education Loans or Perkins Loans into the Direct Loan Program “prior to Sept. 29, 2022,” would be eligible for debt relief.
The changes could cause some confusion after the Education Department had promised simplicity.
“They need simplicity right now. People are too busy to be messing with a long process. We want to make sure the process is simple and easy to go through,” Cardona said.
The student loan revision also came on the same day officials from six Republican-led states, including Arkansas, sued to block the Biden administration from going forward with its student loan debt relief proposal.
It’s believed more than 770,000 people will be affected by the change in the student loan forgiveness plan.