{"id":7286,"date":"2024-11-04T16:28:48","date_gmt":"2024-11-04T16:28:48","guid":{"rendered":"https:\/\/finderica.com\/16-hardship-factors-could-determine-student-loan-forgiveness-eligibility-under-new-program\/"},"modified":"2024-11-04T16:28:48","modified_gmt":"2024-11-04T16:28:48","slug":"16-hardship-factors-could-determine-student-loan-forgiveness-eligibility-under-new-program","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=7286","title":{"rendered":"16 Hardship Factors Could Determine Student Loan Forgiveness Eligibility Under New Program"},"content":{"rendered":"\n
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WASHINGTON, DC – AUGUST 05: Secretary of Education Dr. Miguel Cardona answers questions at the White … [+]<\/span> House on August 5, 2023 in Washington, DC. (Photo by Win McNamee\/Getty Images)<\/span><\/p>\n

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The Education Department officially published proposed regulations last week for a new student loan forgiveness program tied to hardship. The rules outlines more than a dozen factors that could determine whether a borrower would qualify for debt relief.<\/p>\n

\u201cIf finalized as the Department of Education proposes, these rules would authorize student debt relief to millions of borrowers struggling with high medical costs, childcare costs, and other financial hardships such as the impacts of a natural disaster,\u201d said the department in a statement earlier in October.<\/p>\n

The program, the final part of President Joe Biden\u2019s \u201cPlan B\u201d for student loan forgiveness, is forging ahead for now, even as many other elements of the Biden administration\u2019s student loan relief initiatives have stalled due to legal challenges. Observers widely expect the new hardship-based loan forgiveness plan to be challenged, as well, and its fate may ultimately depend on the outcome of this week\u2019s presidential election.<\/p>\n

Hardship Student Loan Forgiveness Plan Details<\/h2>\n

The so-called \u201cPlan B\u201d student loan forgiveness program is designed as a replacement for the one that the Supreme Court struck down last year. That plan, established under a different legal authority, would have wiped out up to $20,000 in federal student loan debt for qualifying borrowers. The Court\u2019s conservative majority ruled that the program was not authorized by Congress under the HEROES Act.<\/p>\n

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The Biden administration\u2019s second attempt involves a provision of the Higher Education Act that allows the Education Department to \u201ccompromise\u201d or \u201cwaive\u201d federal student debt balances in certain circumstances. The initial component of \u201cPlan B\u201d would have provided relief to four categories of borrowers, including those who have experienced runaway interest, and borrowers who first entered repayment on their student loans more than 20 years ago. But that program is currently blocked following a legal challenge.<\/p>\n

The latest portion of \u201cPlan B\u201d would offer two student loan forgiveness pathways for borrowers experiencing hardship. Some people would qualify automatically if the Education Department determines that they are at a high risk of defaulting on their loans, based on information already available to department officials. Other borrowers would need to submit an application, subject to individualized review.<\/p>\n

\u201cIf these rules are finalized as proposed, the Secretary of Education could waive up to the entire outstanding balance of a student loan when the Department determines a hardship is likely to impair the borrower\u2019s ability to fully repay the loan or render the costs of continued collection of the loan unjustified,\u201d said the department\u2019s statement<\/a> last month.<\/p>\n

16 Hardship Factors For New Student Loan Forgiveness Plan<\/h2>\n

Under both pathways, the Education Department would consider at least 16 possible factors or indicators that suggest a borrower is experiencing some sort of hardship that would justify student loan forgiveness. Under the proposed regulations, these factors include the following:<\/p>\n