Days before the deadline for applicants to take advantage of a set of temporary rule exceptions to the government’s student loan forgiveness program for borrowers who work in public service, the Education Department moved to make some of the changes permanent — but not until next year, the New York Times reported. That staggered timetable is likely to create months of messiness. Last year, the Biden administration made sweeping but temporary fixes to Public Service Loan Forgiveness, the long-troubled relief program that allows government and nonprofit workers to have their remaining federal student loan debt eliminated after they’ve made a decade of payments. The government gave borrowers one year to apply for the rule waiver. That period ends on Monday. Borrowers calling to seek help from their loan servicer have recently run into hold times that can exceed nine hours. More than 100 Democratic lawmakers in Congress urged the Biden administration this month to extend the waiver deadline until next year. Instead, the Education Department said on Tuesday that it was sticking with Monday’s deadline but would make some elements of the waiver’s rule changes permanent. Those adjustments, however, will not take effect until July 2023, because federal rule-making policies prohibit the department from putting them into effect sooner. Read more.
In related news, a temporary pause on federal student loan repayments is set to expire on Jan. 1 — meaning millions of borrowers are bracing to repay loans after a nearly three-year reprieve. While the Biden administration called the latest extension the "final" one, some experts predict that the pause could be extended if the legal uncertainty over a new student loan forgiveness plan continues, YahooFinance.com reported. On Friday, hours after President Joe Biden announced that 22 million people had applied for forgiveness, a federal court of appeals issued an administrative stay that bars the administration from dispensing with the loans while it considers a challenge to the program. White House Press Secretary Karine Jean-Pierre declined to discuss the possibility of extending the repayment pause, but she also didn't rule it out when reporters raised questions on Monday. If the legal logjam continues, experts note the administration would have a right to further extend the pause on repayments. “While the Biden administration said that this final extension is a final, final extension, that isn't the first time they said that something was final," student financial aid expert Mark Kantrowitz told Yahoo Finance. The Biden administration might issue a temporary extension if the legal questions remain unsettled by January, he said. The pause could continue if a judge ultimately rules against Biden. “If they lose in court and the president's loan forgiveness plan is blocked," he says, "well nothing stops them really from extending the student loan payment pause and interest waiver further, maybe for the duration of his tenure as president.”
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