The Department of Education estimates that 800,000 borrowers will be excluded from debt relief.
Corpus Christi, Texas — Nearly a month after the Biden administration announced plans to cut student loan debt, a change in the fine print could mean thousands of borrowers are no longer eligible.
Borrowers whose federal student loans are guaranteed by the government but held by private lenders will now be excluded from debt relief.
Experts at Texas A&M University – Corpus Christi and Kingsville are breaking down the latest developments on loan forgiveness.
One testament they have in common is don’t panic: say there are plenty of resources at your disposal to see if you’re affected by this change.
While hundreds of thousands of people will be affected by the change, millions will still be eligible for relief, said Maria Serna, assistant director of financial aid at Texas A&M University-Corpus Christi.
“That’s a large percentage of borrowers, about 800,000,” Serner said. “But you know, in general, most borrowers won’t be impacted by this updated guidance.”
Serna explained that students who went to school before 2010 may still have FFELP (Family Federal Educational Loan Program) loans.
“If these FFELP loans are not held by the current Department of Education, servicer, then these loans are not eligible for loan forgiveness,” Serner said.
Some students may have taken these FFELP loans and consolidated them through the Direct Loan Program, the current loan program for loans originated after 2010.
“Students with FFELP loans consolidated by the Direct Loan Program are still eligible,” Serna said.
Those borrowers can still be forgiven.
“But if your FFELP loan is made through a private lender, then they are the ones who will be affected,” Serna said.
To find out if these changes will affect you, Serna recommends visiting studentaid.gov.
“The first thing you do is contact your loan servicer,” Cerner said. “In order to do this, you can log on to studentaid.gov.”
Raul Cavazos, Director of Financial Aid at Texas A&M University – Kingsville, also recommends using the site as a resource.
“That portal out there will let them see if they’re eligible, or if they’re not eligible for relief,” Cavazos said.
Sandra Johnson, assistant director of financial aid at Texas A&M University-Kingsville, said there are plenty of resources to help you if you have any questions.
“If they’re not sure if they’re eligible for $10,000 to $20,000 in loan forgiveness, applications will be available on studentaid.gov starting next month in October 2022,” Johnson said.
But you may need to be patient because, like you, many others are trying to find the latest information on the site.
“Choose updates, you know, get SMS updates and so on. That way, as soon as the app rolls out, they’re notified and you know that’s the first one to apply,” Cavazos said.
You can also keep an eye out for college financial aid seminars.
Texas A&M University – Corpus Christi will be hosting a workshop October 2-7. 26 Answer any student loan and financial aid questions and concerns. This event is open to the public.