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since president Joe Biden After taking office, the Department of Education canceled federal student loans for nearly 5 million people, totaling $175 billion in relief. according to To the White House.
It does this primarily by improving existing student loan forgiveness programs that have long been plagued by problems, including the Public Service Loan Forgiveness Program and income-driven repayment plans.
Experts say these borrowers are expected to be innocent.
“Any regulatory changes must be forward-looking,” meaning eliminating the loan forgiveness program would only affect new borrowers, explained President Betsy Mayotte. Association of Student Loan Counselorsa nonprofit organization that helps borrowers pay off their debts.
“They are not allowing regulations to be changed retroactively,” she added.
So even if a borrower has been seeking forgiveness under a program like an income-driven repayment plan or PSLF but has not yet received relief, may be safe.
Loan terms, detailed in master promissory note Experts say federal student loan borrowers sign when they repay their debt and cannot change it during the repayment process.
In June, U.S. District Judge Daniel Crabtree in Wichita, Kansas, described student loan forgiveness as “irreversible effects” on his decision to block a Biden administration relief measure.
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Kantrowitz writes in the book that revocations of student loan forgiveness are extremely rare recent article In The University Investor.
In February, for example, some borrowers had their debt reinstated under the Public Service Loan Forgiveness program. But that’s just because Debt canceled due to errorand the borrower has not yet qualified for relief.
“Don’t worry,” Kantrowitz said. “The president has no legal authority to reinstate loans that have been forgiven.”
Still, borrowers should keep track of the notices they receive about debt forgiveness, as well as any loan documents showing a balance of $0, Kantrowitz said.
In a new report, the Consumer Financial Protection Bureau cites “balance restoration” in which a loan servicer redeposits the loan balance into someone’s account.
