Wed, 06 Jul 22 20:07:35 +0000

Under the proposed rules, it may be easier to get a student debt forgiveness

Financial advice for college graduates

New rules proposed by the Biden administration on Wednesday make it easier for borrowers It will be available. Their federal student debt allowed through some existing programs.

This action aims to overhaul a remedy program that has been criticized for its cumbersome paperwork requirements and long processing times. This is based on the government's efforts to expand the cancellation of eligible debt to specific borrowers while President Joe Byden is considering a wider range of student debt exemptions.

"We are working on repairing a broken system," Education Secretary Miguel Cardona said in a statement. "If a borrower is eligible for a student loan remedy, he or she does not need to obtain a pile of documents or a law degree to obtain it."

This proposal will reshape the debt exemption process for students that the university is fooling them with, along with other programs that have a career as a disabled borrower or civil servant.

It is unlikely that you will open your debt exemption to a huge number of borrowers, but it is intended to make it easier for those who are already qualified. The Ministry of Education will finalize the rules by July 1, 2023.

Some of the most important changes are changes in the Borrower Defense Program. Otherwise fraudulent

This program started with a commercial crackdown onduring the Obama era for the last 10 years. The number of complaints is increasing rapidly. UniversityHowever, political and legal conflicts have resulted in a backlog of over 200,000 applications, and some borrowers have been waiting for a decision for years.

Instead of requiring the government to consider each claim individually (a rule set by the Trump administration), with a new proposal, the education department should consider and determine similar groups of claims together. I can.

For example, if a university chain turns out to be fooling students about their work prospects after graduation, the department combines all the claims from that school and puts them in one action. You can approve it. This option is available when there is evidence of widespread school fraud determined by state or federal authorities or through class action.

In the policy change, the Biden administration also wants more universities to be financially responsible for student canceled loans. In the past, loan cancellations were usually passed to taxpayers, but the proposed rules make it clear that the department plans to recover costs from the fraudulent university.

The new plan faced strict scrutiny from the Obama administration, but later elicited criticism from the commercial university industry for finding an ally with President Donald Trump.

Jason Altmaia, President and Chief Executive Officer of the Career Education College and University of the Industry Trade Group, said the policy would be an "unprecedented expansion" of the Ministry of Education's authority.

"The rule proposed today is clear that the Bureau intends to use the rule-making process to collectively pay out federal student loans while hurting disadvantaged institutions and their students. Send a nasty message, "said Altomia.

Overhaul is available for theCivil Service Loan Exemption Program. It was created by Congress as an incentive for government and non-profit workers, but with overly strict requirements.

Current rules allow qualified work workers who make 120 monthly payments to clear the debt of the remaining federal students. All of these payments must be made within 15 days of the payment deadline. Otherwise, it will not count towards 120 payments.

The new action clears the 15-day rule so that payments are counted even if payments are delayed or made in multiples. Also, the borrower can pay up to a year ago instead of paying monthly.

For the first time, borrowers in certain situations were able to move towards a loan exemption without paying. For example, a person who suspends a loan to join a cancer treatment, military service, or peace corps will be treated as if they were paying monthly during that time. The

changes add flexibility, but do not lead to a temporary overhaul of the Biden administration that began last year in response to the pandemic.

This short-term amendment allows the borrower to count past payments as a loan exemption, even if funds are paid for a loan that is not eligible under the rules of the program. This change is in effect until 31 October and the Ministry of Education has urged borrowers to use it before it expires.

More flexibility is added to other programs aimed at helping borrowers with disabilities.

The program proposes to cancel the debt of federal students for those who are permanently disabled and unable to generate significant income. However, many who were given forgiveness regained their debt after failing to submit documents during the three-year surveillance period.

With the new action, the three-year review period is gone and more types of failures are eligible for cancellation. The Byden administration temporarily lifted some of the rules of the program during the pandemic, but the new changes are permanent.

All proposed changes are the result of a federal rule process that has been in the works for over a year. This adds to the Biden administration's efforts to expand debt relief for eligible students through patchwork of existing programs. So far, it has approved nearly $ 26 billion in debt exemptions for more than 1.3 million borrowers.

Biden faces individual pressure to pursue the cancellation of large amounts of debt, and some Democrats are urging him to erase $ 50,000 altogether. As a candidate, Byden upheld the $ 10,000 forgiveness, saying in April he was "scrutinizing" the issue and promised a decision "in the coming weeks." The decision has not been announced.