Connect with us

Hi, what are you looking for?

Finance

Biden Administration’s Plan for Student Loan Forgiveness: Who Might Qualify?

Photo from Nonprofit Quarterly

Following the Supreme Court’s rejection of the original debt cancellation proposal, the Biden administration has announced plans to only offer student loan forgiveness to users who are experiencing “financial hardship.” It’s still not clear who might be able to get this help, but the upcoming rules session of the U.S. Department of Education and other aid programs are giving us hints, CNBC reported.

Biden Administration’s Plan for Student Loan Forgiveness: Who Might Qualify? (Photo from Ramsey Solution)

Potential Eligibility Criteria for Student Loan Forgiveness

The Education Department may use bankruptcy discharge standards as a guide to define hardship for forgiveness eligibility. Borrowers must demonstrate “undue hardship,” proving an inability to maintain a minimal standard of living, unlikely future financial improvement, and a history of genuine repayment efforts, though meeting these requirements is rare.

Negotiators are exploring various indicators of hardship, such as Pell Grant recipients or individuals qualifying for health insurance subsidies. They’re also considering debt-to-income ratios and age as potential markers of financial struggle, albeit challenges persist in accurately capturing certain hardships, like medical expenses.

The government wants to use official records that are already in place, such as information from the Department of Veterans Affairs and the Social Security Administration, to find people who are qualified to borrow money. This method might make charity work easier, but it might miss some problems that are hard to record in official data.

READ ALSO: Child Tax Credit 2024: IRS Announces Refund Timeline, Delays Expected For Some Claimants

Student Loan Forgiveness: Relief Measures Under Review

The Education Department is reviewing its collection practices, including wage garnishment and Social Security benefit garnishment, which consumer advocates deem punitive to struggling borrowers.

Additionally, recent changes have made it easier for borrowers to discharge student loans in bankruptcy court, marking a potential shift towards more lenient relief options.

READ ALSO: Breaking Down The $79 Billion Tax Cut Package: Boosted Child Tax Credits And Key Business Breaks Unveiled For 16 Million Families

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Evergreen

Milwaukee, WI – A recent report on crime rates in Milwaukee has identified the 15 most dangerous neighborhoods, shedding light on areas grappling with...

Finance

Governor Glenn Youngkin of Virginia announces the rollout  of Virginia $400 tax rebate checks this week, alongside the launch of an online tool to...

Evergreen

Violent and property crime on the rise, urging residents to stay vigilant and take precautions.   In a recent study analyzing crime rates across...

Finance

The Oregon Treasury’s recent announcement about its “Checks Without Claims” program is bringing excitement as $10 million in unclaimed property is set to be...