New Student Debt Relief Rules Expand Eligibility
The U.S. Department of Education (DOE) announced the final rules for student loan debt reduction on Oct. 31, 2022. These guidelines clarify, simplify, and expand programme eligibility.
On Oct. 31, 2022, the final rules for expanding who can get targeted debt relief for student loan borrowers were released.
The new rules give borrowers the right to not pay back what they owe and to go to arbitration if their lender misled or manipulated them.
Students who took out loans to go to schools that later closed can get their loans paid off automatically if the school closed while they were still there or within 180 days of when they left.
The rules also say how people who are totally or permanently disabled can get their loans paid off. Capitalization of loan interest has been stopped, unless it was set by law.
The DOE policy allows student loan borrowers to argue they shouldn't repay their loans if their lender misrepresented to them.
Borrower Defense to Repayment and Arbitration
Because many borrowers didn't secure loan discharges when their school closed and their debts defaulted, the DOE will automatically dismiss loans.
Closed School Discharges
The final rule allows disabled people greater possibilities to have their student loans forgiven.
Total and Permanent Disability Discharges
When unpaid interest is added to the principal balance of a student loan, this is called "interest capitalization."
The rules also make it easier for people with student loans to get Public Service Loan Forgiveness (PSLF).
Forgiveness of Public Service Loans
The final guidelines make it easier for student loan borrowers to secure a discharge when a college falsely confirms their loan eligibility.