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The Student Loan Borrowers Who Keep Missing Out on Relief


For similar reasons, the Public Service Loan Forgiveness program, which began in 2007, also excluded those FFEL borrowers. They often didn’t know that, though, and after they called for help, customer support agents often gave them misinformation about their eligibility. The Education Department is now trying to rectify that problem, albeit too late for untold numbers of borrowers.

Through the pandemic, the FFEL borrowers were at an extra drawback. While most federal student loan borrowers have been in a position to pause their payments since March 2020, those FFEL borrowers couldn’t.

On Sept. 29, these same borrowers were upset again.

Here’s why: Once I asked the Education Department in August about FFEL borrowers’ eligibility for the cancellation of as much as $20,000 that it had offered to tens of millions of other borrowers, a senior official said the FFEL borrowers could “sit tight” in the event that they desired to, slightly than moving their debt into the Direct Loan program through a process often known as consolidation.

(Consolidation would have offered easy eligibility for the cancellation, and a number of people took advantage of that. But for quite a lot of reasons — different rates of interest, suspicion that any transfer would go off the rails — some people found it advantageous to maintain their FFEL loans where they were, while awaiting further instructions.)

The official made it clear that the Education Department was not making a advice either way about whether to consolidate. That was since the department said it intended to make it possible for all FFEL borrowers to get relief, even in the event that they didn’t consolidate their loans.

I wasn’t the just one to get this message. Multiple borrowers told me that their loan servicers had told them the identical thing. Betsy Mayotte, a decades-long student loan industry veteran who runs the Institute of Student Loan Advisors, had been passing along the identical “you’ll be able to wait” advice.

Then, on the morning of Sept. 29, every little thing modified. The Education Department’s revised F.A.Q. webpage suddenly said only FFEL borrowers who had, actually, applied to consolidate before that date were eligible for the brand new debt cancellation.

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