Department of Education releases new regulations revamping student loan relief programs
The Department of Education on Monday released a final set of new regulations for its student loan programs, which reverse a number of changes made under the Trump administration and will reduce the amount owed by many borrowers, The New York Times reports.
“The regulations announced today will streamline an unnecessarily complicated system and give borrowers a simpler, more often automatic path to the discharges they deserve,” the education department’s undersecretary said. James Kvaal.
According to the Ministry of Education, the new regulations “Expand eligibility, remove barriers to relief, and encourage automatic discharges for borrowers eligible for loan relief.” The news comes as President Biden’s student loan relief plan, which would forgive up to $20,000 in student debt for millions of Americans, faces challenges. legal issue. Although the application is openmany do not know if their debt will actually be cancelled, the Time keep on going.
The regulations announced on Monday include the elimination of most capitalization of interest, i.e. when “borrowers have unpaid interest added to their principal balance”; better debt forgiveness for civil servants; loan forgiveness for those misled by their institutions; and loan forgiveness for those who become permanently disabled, according to the Department of Education.
“Today is a monumental step forward in the Biden-Harris team’s efforts to fix a broken student loan system and build one that’s simpler, fairer, and more accountable to borrowers,” the official said. US Secretary of Education. Miguel Cardona.
The regulations will come into force in July 2023.