Student Loan Forgiveness Updates

By -

CCCS Announces Major Updates to New Student Loan Forgiveness Program

CCCS Operates the Only Local Student Loan Counseling Program Available in WNY Region

Consumer Credit Counseling Service (CCCS) today announced more updates in the world of Student Loans and Loan Forgiveness. Last month, CCCS detailed major, long awaited changes to student loan forgiveness, the most important of which was:

  • For those earning less than $125,000 a year—or couples with incomes under $250,000--up to $10,000 in federal student loan debt will be forgiven. If individuals used Pell grants to attend college (which are reserved for students with greatest financial need), up to $20,000 in federal student loan debt will be forgiven. 

This came on the heels of the overhaul of the Public Service Loan Forgiveness (PSLF) Program, where significant changes enabled hundreds of thousands of loan recipients to access loan forgiveness.  Launched in 2007, the PSLF was designed to encourage college students toward employment in public service professions such as teaching, healthcare, human service work, military service, civic and government work for ten years. After making regular monthly loan payments 120 times (equaling ten years); the government pledged to forgive the remaining balance of the individual’s student loans.

The PSLF was initially met with much excitement. However, when the first generation of borrowers to complete 10 years of public service began applying for PSLF loan forgiveness in 2017-2018, the denial rate was 99%.

Through the “limited PSLF waiver”, which refers to time-limited changes to the PSLF Program rules, past loan payments that were previously ineligible will now count, moving some borrowers closer to the finish line. Borrowers who have worked 10 years in a qualifying job may be eligible for loan relief no matter what kind of federal loan or repayment plan they have. Previously loans from the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan Program did not qualify for the PSLF, but borrowers may now act by consolidating their loans into a Direct Consolidation Loan by Oct. 31, 2022 in order to make them eligible.

Today’s announcement includes more good news.

Major New Changes Announced:

  • Borrowers with federal student loans that are currently in default with a temporary opportunity for a “Fresh Start” in repayment. The Fresh Start program eliminates the impact of delinquency and default and will allow borrowers to reenter repayment in good standing when the payment pause ends. The loans eligible for Fresh Start are Direct Loans, FFEL loans (regardless of whether they are Department-held or commercially held), and Department-held Perkins Loans that entered the payment pause in default.
  • Payments made during the pandemic—during a national pause on payments—can be refunded. People who want refunds should contact their Loan Servicers by November 15th. Mandatory student loan payments as well as interest accrual have been “on pause” since March 13, 2020, the beginning of the pandemic. 98.8% of borrowers did not make payments during this time period but those who did can receive refunds. About 37 million student loan borrowers skipped nearly $200 million in payments during the pause, according to the Federal Reserve Bank of New York.
  • Until October 31, 2022, there is a one-time waiver from many of the complex requirements of the Public Service Loan Forgiveness (PSLF) for borrowers who work full-time in public service jobs and make 120 qualifying monthly payments through an eligible repayment plan. 

Payment Pause Extended Until January 1, 2023

President Biden officially extended the “student loan payment pause” until January 1, 2023. Interest rates will remain at 0% until repayments start in January 2023. Biden states that this will be the last extension for student loan payments.

With just about 70% of college graduates leaving school with student loan debt, it is certain that student loans will continue to be part of the landscape for much of the WNY community. Last year, the average per person debt was $35,397 and the typical monthly payment--$393 per month. At current time, nearly 2.4 million New Yorkers have outstanding student loans totaling more than $90 billion combined.

Consumer Credit Counseling Service (CCCS) operates the only Student Loan Counseling Program in all of Western New York and encourages area residents to contact them at 716-712-2060 or www.consumercreditbuffalo.org for help with student loans or for any type of financial issues.  

CCCS designed its program to specifically meet the needs of the growing population segment of student loan borrowers. Certified Financial Counselors understand that many of those coming for help feel overwhelmed with anxiety and fear and often see individuals who have fallen prey to the abundance of unscrupulous companies claiming to help. 

CCCS urges everyone to take positive action that will promote financial stability: For those interested in any type of help--call 716-712-2060 or visit www.consumercreditbuffalo.org 

 

 

  

Comments

Post a Comment

Popular posts from this blog

Details of President Biden’s New Student Loan Forgiveness Program; Announces Final Extension to Student Loan Repayment Program

By -
  Millions of Americans have waited eagerly over these past two and a half years for student loan forgiveness. This week, President Biden issued the first of his student loan forgiveness plans. For those earning less than $125,000 a year—or couples with incomes under $250,000--up to $10,000 in federal student loan debt will be forgiven . If individuals used Pell grants to attend college (which are reserved for students with greatest financial need), up to $20,000 in federal student loan debt will be forgiven.   President Biden also this week officially extended the “ student loan payment pause” until December 31 st , 2022. Interest rates will remain at 0% until repayments start in January 2023. Biden states that this will be the last extension for student loan payments.   Mandatory student loan payments as well as interest accrual have been “on pause” since March 13, 2020, the beginning of the pandemic. 98.8% of borrowers did not make payments during this time perio...
Read more

Debt Management FAQs - Part 2

By -
What types of debts can be included in a Debt Management Plan (DMP)? You would be able to include any credit cards, personal loans, medical bills, or collection accounts. What types of debts CANNOT be included in a DMP? You would not be able to include student loans, mortgage, auto loans, or personal loans that are secured by collateral. What are the costs associated with a DMP? There is a monthly service charge of $35* (included in your monthly payment to us), and a one time initial set-up fee of $55* (payable with your first month’s payment only).  Unlike a debt settlement or debt relief agency, we do not charge fees based on a percentage of your debt, and the fees are nominal to cover administrative costs only, as we are a non-profit.  There are no “hidden” fees.  The only other fee you would ever see from CCCS is if your payment was returned (bounced check or returned ACH), and the amount of that fee is $25. *The amount of the monthly service charge and set-up fee may...
Read more

Loan Cancellation for Student Loan Borrowers Who Attended Corinthian Colleges

By -
Today, the U.S. Department of Education announced the cancellation of $5.8 billion in federal student loans for 560,000 individuals who borrowed to attend schools owned by Corinthian Colleges, the for-profit college conglomerate that is now defunct. Corinthian was a notorious repeat offender that defrauded its students and the public over many years. This loan cancellation would not have been possible without the tenacity of so many individual student loan borrowers harmed by Corinthian’s tactics. Many of them came forward to law enforcement agencies and regulators to detail systemic abuses. Others even had the courage to make their stories public to urge government authorities to act, rather than sitting on the sidelines. Over the last decade, I had the opportunity to speak with many of them to learn about Corinthian’s conduct. The Consumer Financial Protection Bureau and state attorney general actively pursued Corinthian for its misconduct. The CFPB filed a lawsuit in 2014, obt...
Read more