General student loan forgiveness is still being challenged in court, but the Department of Education released new regulations for borrowers that could potentially ease the financial burdens of borrowers.
According to Secretary of Education Miguel Cardona, the newly released regulations will focus more on students who have been defrauded or deceived.
“These transformational changes will protect students who’ve been cheated by their colleges from the bureaucratic nightmares of the past and ensure that all our targeted debt relief programs live up to the promises made by Congress in the Higher Education Act,” said Cardona. “We’re also protecting borrowers from higher costs by limiting the practice of tacking unpaid student loan interest onto their principal balances.”
Some of the new regulations include:
An easier path for borrowers to challenge their repayments if they are deceived by their institutions.
Automatic discharges of loans for students who attended schools that were shut down.
A cleaner process for relief for students who have received a permanent disability.
Limiting of interest capitalization.
An update to the public service loan forgiveness program.
This is all potentially in addition to the $10,000 to $20,000 student loan forgiveness for all federal borrowers pending the outcome of the legal challenges.
Read the full release here.