For similar reasons, the Civil Service Loan Forgiveness Program, launched in 2007, also excluded these FFEL borrowers. However, they were often unaware of it and when they sought help, customer service representatives often provided incorrect information about their qualifications. now trying To rectify that problem, albeit too late for countless borrowers.
FFEL borrowers were even more disadvantaged during the pandemic. Most federal student loan borrowers have been able to suspend payments since March 2020, but FFEL borrowers have not.
On September 29th, these same borrowers were disappointed again.
Here’s why: Asked in August if the Department of Education was eligible to cancel up to $20,000 that FFEL borrowers had offered millions of other borrowers, a senior official said if FFEL borrowers wanted to “sit still.” ’ said he could. Rather than transferring debt directly to loan programs through a process called consolidation,
(The integration provided immediate redemption eligibility, which many people took advantage of. However, for various reasons (differences in interest rates, suspicion that transfers would not get off the ground, etc.), some Those in the department felt it would be advantageous to keep FFEL on loan where they were while awaiting further instructions.)
Officials clarified that the Department of Education is not recommending either way on whether to consolidate. This is because we stated that it was intended to allow
I wasn’t the only one getting this message. Multiple borrowers have told me that their loan servicers have told them the same thing. Betsy Mayotte is a decades-long veteran of the student loan industry. Association of Student Loan Advisorswas conveying the same “you can wait” advice.
Then, on the morning of September 29th, everything changed. The Department of Education’s revised FAQ webpage suddenly stated that only his FFEL borrowers who had actually applied for consolidation prior to that date would be eligible for the new debt forgiveness.