Loan Forgiveness: Student loan issues in the U.S. are worsening. Over 9.7 million individuals are delinquent on their loans. This is a huge increase, indicating that large numbers of borrowers are unable to keep pace. Over 15 out of every 100 government loans are presently in arrears. In total, all these missed payments have totaled over $250 billion.
New Rules Complicate Forgiveness
Simultaneously, the government is modifying student loan forgiveness regulations. In the Trump administration, the regulations are tightening up. A program benefiting individuals who worked in government jobs—such as teachers, nurses, and cops—is being reduced. Only particular workplaces and types of jobs will now qualify under loan forgiveness. If your work is in a facility the government deems broke the rules, you won’t qualify anymore. Lots of folks who assumed their loans would be forgiven will miss out.
Borrowers Can Battle Back in Court
These new regulations are spreading fear and outrage. Specialists say individuals will probably go to court to sue to stop them. But even if they succeed, it may take a long time. In the meantime, borrowers must cope with the tighter regulations and cannot count on the forgiveness that had been promised.
Student Loan System Might Be Transferred
There is also a large change under consideration. A new order proposes shutting down the Department of Education and transferring the student loan program to the Small Business Administration. The plan awaits Congressional approval. However, this plan is questionable as many people thing that the unit that has managed student loans for decades would no longer have that responsibility might be very bad. Few are certain the new unit understands enough about student loans to manage them effectively. This may create even greater confusion.
Fewer Humans Available to Assist Borrowers
Fewer workers are currently assisting with student loan problems. This can make it more difficult for borrowers to be assisted. The government cautions that if you don’t act soon, your loan will be reported as being late. This could decrease your credit score and damage your ability to borrow money in the future. If you miss payments for an extended period of time, the government might even take money out of your paycheck.
Some Good News: Assistance from Employers
One tiny bit of good news is that some employers now assist employees in paying off student loans. A new law permits companies to contribute to their employees’ retirement funds when the employees use their own funds to repay student loans. This assists individuals in saving for the future and repaying debt. More individuals are enrolling in this benefit, with an increase in participation by 13.5%.
Payment Plans and Consolidation Are Available Again
One more piece of good news is that income-based repayment plans and consolidation of loans are once again available for applications. These allow people to have reduced monthly payments if they earn less. A court had suspended these options before, but now individuals can reapply. But the applications aren’t being processed as yet, so individuals will have to wait.
A Challenging Road Ahead
The future of student loans is uncertain. Millions of individuals are anxious about what lies ahead. With more skipped payments, fewer individuals lending assistance, and more stringent guidelines for forgiveness, it doesn’t look good. Borrowers are experiencing a great deal of stress. Significant changes are being implemented rapidly, and a lot of people don’t know what to anticipate.
All in all, the road ahead is confusing and challenging for the students and it will be interesting to see how the govern solves this burning issue of students loan.
