As of today, federal student loan borrowers with private loans will now no longer be able to qualify for consolidation or any other relief provided by President Biden’s student loan forgiveness program, per a stunning decision by the U.S. Department of Education.
In August, he discussed his plans to address the country’s massive student loan debt. This included forgiving $10,000 for borrowers earning less than $125,000 per year and extending the payment moratorium until the end of the year. The plan also stipulated that low-income college attendees who qualified for Pell Grants will receive up to $20,000 in student loan forgiveness.
“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” President Biden Tweeted just ahead of his public address in August.
Since then, several outlets have reported the U.S. Dept. of Education has quietly adjusted the guidance of the forgiveness program, ultimately locking out a large swath of borrowers from relief.
Right now, it appears that those with Federal Family Education Loan Program, or FFEL, loans not allocated by the government would also be ineligible.
This could affect hundreds of thousands of borrowers, about 770,000 according to an administration official as reported by CNBC. And it could continue to affect future generations of college-goers.
It’s reported that students and parents borrowed about $95.9 billion in the 2020-2021 academic year, and 13% of that were private and other nonfederal loans.
Black families take out student loans at higher rates than other races — and they owe more than other groups. Black families hold about 30.2% of student loan debt, as compared to 20.0% of white.