Important Update for Student Debt Holders: Check Your Email!

The Biden-Harris Administration has announced a significant step in its ongoing effort to provide student debt relief for millions of borrowers this fall. On August 1, the U.S. Department of Education planned to email borrowers with at least one outstanding federally held student loan to inform them about potential debt relief and the option to opt-out to avoid receiving this assistance. This initiative aims to extend relief to over 30 million borrowers, building on the $168 billion already approved for nearly 4.8 million.

Details on the Important Update for Student Debt Holders

The Department has begun notifying borrowers of potential student debt relief and giving them until August 30 to contact their loan servicer if they wish to opt-out. The proposed rules for this relief are still under review, and the emails do not guarantee eligibility. The finalized rules will be communicated this fall, providing additional information to borrowers.

♦Key Groups Eligible for Debt Relief 

The proposed rules, if finalized, will authorize partial or full debt relief for several groups of borrowers:

1. 1. 1. Borrowers with Growing Loan Balances: Relief will be available for borrowers whose loan balances have increased due to accrued interest. This is expected to impact nearly 23 million borrowers, many of whom are Pell Grant recipients.
      2. Long-Term Repayment Borrowers: Borrowers who have been in repayment for over 20 years (undergraduate loans) or 25 years (graduate loans) will be eligible for relief.
      3. Eligible for Loan Forgiveness: Borrowers eligible for immediate forgiveness through income-driven repayment plans or other forgiveness programs who have yet to apply will also benefit.
      4. Low-Financial Value Programs: Borrowers who attended institutions that did not deliver sufficient financial value or meet accountability standards will receive relief.

♦How to Opt-Out and What to Expect

Borrowers can opt-out of this debt relief by contacting their servicer by August 30, 2024. Those who opt-out will be temporarily ineligible for forgiveness until the Department reassesses their eligibility. Once the rules are finalized, no application is needed for those who wish to receive the relief.

The Administration’s Commitment to Reducing Student Debt

The Biden-Harris Administration has consistently worked to ease the burden of student debt. With significant increases in Pell Grants and new protections for borrowers from unaffordable debts, the Administration has taken historic steps. Approved debt relief so far includes:

• • $69.2 billion for 946,000 borrowers through Public Service Loan Forgiveness (PSLF) fixes.
  • $51 billion for over 1 million borrowers through adjustments to IDR payment counts.
  • $28.7 billion for more than 1.6 million borrowers defrauded by their schools or affected by closures.
  • $14.1 billion for over 548,000 borrowers with total and permanent disabilities.
  • $5.5 billion for 414,000 borrowers through the SAVE Plan.

For more detailed information on student debt relief, visit StudentAid.gov/debt-relief.

The Biden-Harris Administration’s commitment to student debt relief continues with these latest steps. By providing updates and options for borrowers, the Administration aims to ensure that as many borrowers as possible receive the relief they need. Stay informed and check your email for important updates regarding student debt relief.

References

Biden-Harris Administration Takes Next Step Toward Additional Debt Relief for Tens of Millions of Student Loan Borrowers This Fall. (July 31, 2024). U.S. Department of Education Press Release.