The Biden administration has discreetly changed the eligibility criteria for its proposed student loan forgiveness plan.
Borrowers who have federal student loans that are held by private lenders but are guaranteed by the government will no longer be eligible for debt relief. According to a government official, the adjustment will have an impact on about 770,000 people.
Loans that were made under the Federal Family Education Loan program and Federal Perkins Loan program would be eligible for the one-time forgiveness action if the borrower consolidated their loan into the federal Direct loan program.
Initially, the program promised up to $10,000 in debt relief for general borrowers and $20,000 for pell grant recipients. Those numbers still hold true for most borrowers of federal loans.
The change comes on the heels of several red states suing the Biden Administration in an attempt to prevent the implementation of the massive student loan forgiveness program. Student loan forgiveness was a central part of Joe Biden’s 2020 presidential campaign. Recently the non-partisan Congressional Budget Office estimated the cost of the proposed program at around $400 billion. That estimate included borrowers who would now be excluded per the latest guidance.