Biden administration proposes sweeping changes to student loan forgiveness programs

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Biden administration proposes sweeping changes to student loan forgiveness programs

The Biden administration proposed a wide range of changes to student loan forgiveness programs that would reduce bureaucracy that is currently standing in the way of some borrowers having their debt canceled.

Education Secretary Miguel Cardona said that if a borrower qualifies for student loan relief, it shouldn't take mountains of paperwork or a law degree to obtain it. Student loan benefits should not be so hard to get that borrowers don't actually benefit from them. The proposed changes, which the Department of Education hopes to finalize later this year, would make it easier for those who already qualify for debt relief.

The Education Department will start processing claims in groups instead of individually under the borrower defense program, designed for students who believe that their college lies or takes advantage of them.

The Public Service Loan Forgiveness program, which allows government and nonprofit employees to have their loans forgiven after making 120 monthly payments, will get an overhaul.

Workers in eligible jobs must be in full within 15 days of the due date, such as making the payment in full. The 15 day requirement would be eliminated by the new rules.

Whether it is for closed school discharges, borrower defense claims, PSLF or relief after a total and permanent disability, borrowers have had to navigate narrow rules and a needlessly complicated system, according to James Kvaal, the Under Secretary of Education.

Kvaal said that the regulations we proposed today would remove many of those barriers and help create a federal student loan system that works better for borrowers.

Two rounds of student loan forgiveness last month was worth $12 billion, mostly for students who attended for-profit colleges.

The president has so far resisted calls from the progressive wing of his party to cancel up to $50,000 in student loan debt for every borrower, but the Washington Post reported in May that he is considering a smaller, more targeted cancellation of student debt.