Hundreds of thousands of Americans will be forgiven student debts: to whom and how much they can write off - ForumDaily
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Hundreds of thousands of Americans will be forgiven student debts: to whom and how much they can write off

Student loan write-offs: half a million people will benefit from the renegotiation of contributions, some immediately, reports USA Today.

Photo: Shutterstock

The government service loan write-off program had to be simple.

If college graduates were willing to give up lucrative private sector wages and instead work as teachers, police officers, or government employees, any federal student debt they had after 10 years of payments would be written off.

Но программа была» беспощадна». Спустя более десяти лет после ее создания в 2007 году тысячи и тысячи заемщиков обратились с просьбой о списании. Федеральное правительство отклонило почти все из них.

The situation should change starting this fall.

The Department of Education on Wednesday announced a radical overhaul of its loan write-off program, which will immediately pay off 22 borrowers in arrears worth $ 000 billion. The government estimates that another 1,7 borrowers could receive about $ 27000 billion in debt relief if they can prove they worked in a suitable job.

Изменения призваны позволить заемщикам исправить ошибки и подсчитать платежи, которые они пытались внести в программу. Правительство заявило, что это должно сократить время, в течение которого более 550 000 заемщиков — тех, кто уже консолидировал свои ссуды — должны произвести платежи, чтобы получить списание.

Реструктуризация программы списания ссуд на государственные услуги — это последняя попытка президента Джо Байдена решить проблему растущей задолженности страны по студенческим ссудам на $1,7 триллиона и облегчить бремя испытывающих трудности заемщиков.

Progressives called on Biden to write off loans of up to $ 50 per borrower, but instead the executive rolled out targeted assistance, such as for those who were defrauded by their college or for those who were permanently disabled. With the changes to the civil service program, the federal government has written off about $ 000 billion in student loan arrears.

«Заемщики, которые посвятили десять лет своей жизни государственной службе, должны иметь возможность полагаться на обещание списания ссуд на государственной службе», — сказал министр образования Мигель Кардона. «На сегодняшний день система не выполнила это обещание, но это скоро изменится для многих заемщиков, которые служили своим общинам и своей стране».

The changes came after a series of critical reports about the inaccessibility of write-off of loans for public services. CBS's "60 Minutes" recently reported on veterans of the military who tried to get forgiveness but failed.

And an advocacy group at the Student Borrower Advocacy Center found that loan service provider FedLoan refused to write off thousands of borrowers due to minor errors or paperwork problems.

Seth Frothman, the group's chief executive, often criticizes the way the Department of Education handles student loans, especially the government service loan write-off program. But he said he was encouraged by the department's proposed changes.

«Это хороший день для учителей, медсестер, военнослужащих и миллионов рабочих, находящихся на передовой пандемии, — сказал Фротман. — Слишком долго те, кто больше всего жертвуют для наших сообществ и нашей страны, получали отказ и были вынуждены брать на себя долги, которые следовало аннулировать».

On the subject: In California, schoolchildren are required to be vaccinated against COVID-19

And the country's two largest teacher unions, the American Federation of Teachers and the National Education Association, have in separate statements commended the changes and said they will benefit educators and other public sector employees. Both have long pushed the Department of Education to fix what they called a broken program.

Demanding Demands Make It Difficult to Get Forgiveness

The problem with writing off public service loans stems from demands for assistance.

Borrowers seeking write-offs must be employed in a position the government considers to be a public service, and they must make 120 payments through an appropriate income-based repayment plan. And only borrowers with loans provided by the federal government, known as direct loans, are eligible for assistance.

Десятки тысяч людей думали, что они соответствуют требованиям, но испортили один из этих критериев — заплатив неправильный тип ссуды, не участвуя в плане погашения, основанном на доходе, до совершения платежей или работая на работе, которая, как они позже обнаружили, не подпадает под программу списания- и им не повезло.

Prior to the announcement, only 16 borrowers had been able to write off their debts through the program, according to the Ministry of Education. About 000 million people are trying to pay off their debts through the program.

Changes in the loan write-off program will occur in two parts

Photo: Shutterstock

The agency will first loosen some of the rules that prevented eligible borrowers from repaying their loans through limited waiver. The government, for example, will allow payments on any person's loan to be counted towards the total amount needed to write off.

The department said it will automatically lend to borrowers who already have direct loans and have proven to be working in the relevant field. Others who did not participate in the program or have inappropriate federal loans will have to apply for a write-off, which may require them to consolidate their loans. Borrowers must apply by October 2022.

The Department of Education also plans to review any government loan write-offs that have been denied and to provide federal employees with an automatic pardon loan.

Other changes will take place more slowly through the rules created by “rule-making,” a lengthy and complex bureaucratic exchange of views between government and other stakeholders.

Only some loans are eligible for write-off

One of the most problematic parts of writing off a government service loan is that many borrowers had the wrong type of loan and did not realize they were not eligible for assistance.

When the loan write-off program was first introduced, many of the loans offered by the federal government were federal family education loans or loans made through private organizations but insured by the federal government. The government stopped offering these loans in 2010 and now relies on direct loans that are write-off. The Department of Education reported that about 60% of borrowers with an approved employer have FFEL loans.

«Для непрофессионала было бы не очень очевидно, что у вас был неправильный тип ссуды, — сказала Бетси Майотт, президент Института консультантов по студенческим ссудам.

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Borrowers had no choice about what type of loan they would receive, she said. The Mayotte nonprofit has helped thousands of borrowers pay off their student loans, and it helps manage a public service loan forgiveness reddit account. She said that many of the problems she solves these days have to do with borrowers with inappropriate loans.

She said worried borrowers might want to consider bundling their loans into a single direct loan if they have not already done so.

According to Mayotte, if borrowers are not sure what type of loan they have, they can request this information from their lending institution or check for the federal government's website for financial aid.

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Miscellanea In the U.S. Students Student loan write-offs Department of Education Borrowers civil servants
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