The US Department of Education has announced major rule changes to expand and improve student loan repayment programs.
According to a media release issued by the department on July 6, the proposed reforms are aimed at easing the student loan burden for borrowers whose institutions have closed or lied to them, those who are totally or permanently disabled, and government workers who are not missed payments to be eligible for the Public Service Loan Forgiveness (PSLF) programme, reports Erudera College News.
In addition, the changes include the removal of interest capitalization cases that occur when unpaid interest is added to the principal balance of the loan.
The statement noted that the proposals build on the work of the Biden-Harris administration to improve the student loan program, make college more affordable, and provide tens of billions of dollars in aid to more than one million students with loans. throughout the country.
“We are committed to fixing a broken system. If a borrower is eligible for student loan relief, getting it won’t require a mountain of paperwork or a law degree. Nor should student loan benefits be so onerous that borrowers never take advantage of them.” This was stated by the US Secretary of Education Miguel Cardona.
In addition, the department’s recommendations include giving borrowers a day in court in case of disagreements with the colleges they are enrolled in.
“The Biden-Harris administration is determined to build a more accessible, affordable and accountable student loan system. These proposed rules will protect borrowers and save them time, money and frustration, and hold their colleges accountable for violations.” Cardona added.
The department notes in its statement that federal student loan programs will be improved after the proposed changes are finalized. The department is expected to finalize these changes by November 1, 2022, meaning they will take effect on July 1, 2023.
Deputy Education Minister James Quall said many borrowers faced barriers trying to get the loan relief they were eligible for. Quall emphasized that the proposed rules would eliminate many of these barriers and help create a better federal student loan system for borrowers.
“Borrowers don’t have to jump through hoops to get the relief they deserve.” Kval said.
To date, the Biden-Harris administration has been more successful than any previous administration, approving nearly $26 billion for more than 1.3 million federal student loan borrowers.
This relief includes:
- Almost $8 billion through borrower protection
- Nearly $9 billion in completely and permanently incapacitating borrowers
- More than $8 billion to public employees through the PSLF program
- More than $1 billion in closed schools