Biden Admin Quietly Makes Reversal on Student Loan Forgiveness Program, Scales Back Eligibility

The Biden administration quietly issued an update to its student loan forgiveness plan on Thursday, drastically scaling back eligibility on the same day that six Republican-led states filed a lawsuit against President Joe Biden, claiming his student loan forgiveness plan is illegal.

As of Thursday, borrowers who have federal student loans that are owned by private entities and not by the U.S. Department of Education will no longer qualify for the relief program.

Previously, the administration had said those borrowers with student loans owned by private entities, many of which were made under the former Federal Family Education Loan (FFEL) program and Federal Perkins Loan program, would qualify for relief of up to $10,000 or $20,000 in loan forgiveness, as long as the borrower consolidated his or her debt into the federal Direct Loan program.

The guidance now states: “As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.”

More than 4 million student loan borrowers have privately held loans through the FFEL Program, according to NPR.

“Our goal is to provide relief to as many eligible borrowers as quickly and easily as possible, and this will allow us to achieve that goal while we continue to explore additional legally-available options to provide relief to borrowers with privately owned FFEL loans and Perkins loans, including whether FFEL borrowers could receive one-time debt relief without needing to consolidate,” the Department of Education said in an emailed statement to CNN.

Activists rally outside the White House on July 27, 2022 to call on President Joe Biden to cancel student loan debt. It turns out student loans cost taxpayers much more than the Government Accountability Office estimated. (Anna Moneymaker/Getty Images) ‘Highly Uncertain Assumptions’

“Borrowers with privately held federal student loans who applied to consolidate their loans into Direct Loans before

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