Additionally, the FSA will increase oversight of student loan servicers. It will restrict their ability to enroll borrowers in forbearance by text or e-mail. It will also perform an external review on student loan servicers’ forbearance use and practices to address steering.
The FSA will immediately implement these changes. However, borrowers will see the effect on their accounts in the fourth quarter of 2022.
More than 3.6 million borrowers will receive at least three years of additional credit towards IDR forgiveness. At least 40,000 borrowers under the PSLF program will receive immediate debt cancellation, according to the FSA’s estimate.
In a statement, U.S. Secretary of Education Miguel Cardona said, “Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for.”
“Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plans. These actions once again demonstrate the Biden-Harris administration’s commitment to delivering meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively,” he added.
