These Student Loans No Longer Qualify For Forgiveness — Is Yours One?

Mandatory Credit: Photo by Shutterstock (13429790p)United States President Joe Biden speaks during a press conference after being briefed on the impact of Hurricane Ian and ongoing federal government response efforts at the FEMA Headquarters in Washington, DC on Thursday, September 29, 2022.
Shutterstock / Shutterstock

Under President Biden’s student loan forgiveness program, individual borrowers who earned less than $125,000 in 2020 or 2021 will see up to $10,000 or $20,000 of their federal student loan debt forgiven. As of Sept. 29, 2022, some loans may no longer qualify.

Zelle Facebook Marketplace Scam: How To Recognize and Avoid This Scam
Student Loan Forgiveness: Mark These 4 Dates On Your Calendar Now

According to new guidance from the Education Department, it will no longer allow borrowers who have federal student loans that are owned by private entities to qualify for loan forgiveness, CNBC reported. Borrowers will also no longer be able to consolidate their loans to qualify for forgiveness.

CNBC also noted that borrowers with FFEL or Perkins loans not held by the Education Department can only qualify if they applied for consolidation before Sept. 29.

An administration official stated that roughly 770,000 will be affected by this policy change.

Politico reported that while it’s unclear why the Biden administration made this decision, industry officials and policy experts have warned about the legal complexities associated with loan forgiveness. For weeks, top Education Department officials and industry groups have been attempting to strike a deal in which the companies were compensated for their losses to avoid suing the administration.

Save for Your Future

Take Our Poll: Are You Struggling To Keep Up With Your Utility Bills?
More: 22 Side Gigs That Can Make You Richer Than a Full-Time Job

Politico added that the Education Department said on its website (on Sept. 29) that it “is assessing whether there are alternative pathways to provide relief to borrowers with federal student loans not held by [the Education Department], including FFEL Program loans and Perkins Loans, and is discussing this with private lenders.”

More From GOBankingRates

Share This Article:

Save for Your Future

About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
Learn More

1pximage