Many lose eligibility for loan forgiveness
NEW YORK – The government is taking back at least $5 billion in student loan forgiveness programs and is set to roll out another, with loan forgiveness for low-income borrowers set to begin this fall.
The Treasury Department said Oct. 8 that it will restore loans for students who qualify with at least three years of school and at least half their family’s income.
That would be $1 billion worth for borrowers who met the criteria and were under the age of 24.
The department said the loan forgiveness for those eligible is expected to grow from $1.1 billion annually this fiscal year to more than $20 billion annually by the 2018-19 school year. The department said it would be releasing details of the new loan program later this month.
The department has set up a web page to guide students to apply for the loan forgiveness; click here for a link to apply.
There are still additional forgiveness programs that haven’t been announced, including loan forgiveness for veterans who received more than half their pay for service. According to the department, they would receive between $10,002 and $10,500.
Loans for veterans are covered under the Veterans Affairs Department, but the department doesn’t provide information on how to apply.
The department said that while the low-income programs are being restored, it would continue to give more borrowers who earn below $50,000 a year more than $5,000 in payments as their loans mature.
The student loans are part of a program called Pay As You Earn that was created after the 2001 recession to help students afford college in the wake of the crash in the housing market.
The department’s announcement comes after the Senate Finance Committee advanced a measure on Tuesday to extend the loan forgiveness program for another four years.
The House of Representatives earlier this month passed a measure that would extend the loan forgiveness program for three years and set up a program where borrowers could begin repaying their loans later if they received a bachelor’s degree or a certificate in education, training or experience