![]() The plaintiffs argued that student loan servicers – including the Higher Education Loan Authority of the State of Missouri, known as MOHELA – are harmed by Biden’s student loan forgiveness plan. No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed,” Nebraska Attorney General Doug Peterson’s office said in a news release. “In addition to being economically unwise and inherently unfair, the Biden Administration’s Mass Debt Cancellation is another example in a long line of unlawful regulatory actions. The lawsuit was filed in a federal court in Missouri by state attorneys general from Missouri, Arkansas, Kansas, Nebraska and South Carolina, as well as legal representatives from Iowa. Lawsuit argues forgiveness will hurt loan servicers This is a completely different program than Direct Loans,” the statement said. The FFEL program is now defunct and only a small percentage of borrowers have FFEL loans. “Borrowers with privately held federal student loans who applied to consolidate their loans into Direct Loans before Septemwill obtain one-time debt relief. “Our goal is to provide relief to as many eligible borrowers as quickly and easily as possible, and this will allow us to achieve that goal while we continue to explore additional legally-available options to provide relief to borrowers with privately owned FFEL loans and Perkins loans, including whether FFEL borrowers could receive one-time debt relief without needing to consolidate,” the Department of Education said in an emailed statement. ![]() There are about 4 million borrowers with Federal Family Education Loans, but not all of those people are likely eligible for the loan forgiveness plan, which also includes an income requirement. According to its website, privately held federal student loans must have been consolidated before September 29 in order to be eligible for the debt relief.īorrowers with privately held federal student loans who have not consolidated yet are currently out of luck, though the Department of Education said it “is assessing whether there are alternative pathways” to provide relief.īorrowers with privately held federal student loans represent a small portion of the 43 million federal student loan borrowers. On Thursday, the department reversed course. The Department of Education initially said these loans, many of which were made under the former Federal Family Education Loan program and Federal Perkins Loan program, would be eligible for the one-time forgiveness action as long as the borrower consolidated his or her debt into the federal Direct loan program. Around 770,000 people will be affected by the change, according to an administration official. ![]() ![]() The Biden administration scaled back eligibility for its student loan forgiveness plan Thursday, the same day six Republican-led states sued President Joe Biden in an effort to block his student loan forgiveness plan from taking effect.īorrowers whose federal student loans are guaranteed by the government but held by private lenders will now be excluded from receiving debt relief. ![]()
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