Current student loan news for the week of November 15, 2021

Education Secretary Miguel Cardona has announced that the next round of civil service loan forgiveness debt cancellation benefits will roll out in the coming weeks, with more than 30,000 borrowers benefiting from an automatic discount. In addition, the federal manager of student loans PHEAA signed a one-year contract extension with the US Department of Education. Here’s what to know about this week’s student loan trends.

2 current trends in student loans for the week of November 15, 2021

1. Over 30,000 borrowers to receive student loan forgiveness in the coming weeks

Education Secretary Miguel Cardona announced in a series of tweets that veterans and the military are among the 30,000 student loan borrowers next on the list of their loan balances released through Public Service Loan Forgiveness (PSLF). This wave of discounts is part of the recent program overhaul, which temporarily eased strict eligibility requirements and allowed many borrowers to automatically progress to the promised discount.

Cardona’s Twitter statement claimed the overhaul would forgive around $ 2 billion. About 10,000 have already released $ 175 million, while 20,000 “will receive emails in the coming weeks.”

How it affects student loans

Cardona advised PSLF attendees to keep an eye on their inboxes in the coming weeks for more information on their PSLF status. Borrowers will be notified if their debt is going to be canceled, so it’s a good idea to review your contact information on the Federal Student Aid website and to check your spam folder regularly.

If you have not yet registered for the PSLF, the window to take advantage of these new eligibility conditions ends on October 31, 2022. If you consolidate your loans and apply to the program before this date, you may receive an automatic payment progression. . that you have made on previously ineligible loans.

Key to take away

The next wave of PSLF approvals will be launched soon, canceling $ 2 billion in debt. Eligible borrowers should keep an eye on their inbox for further details.

2. The PHEAA extends the contract with the Ministry of Education until December 2022

The Pennsylvania Higher Education Assistance Agency (PHEAA), also known as FedLoan Servicing, signed a one-year contract extension with the Department of Education’s Federal Student Aid (FSA) office before its initial expiration date December 14, 2021. The contract will now expire in December 2022.

This expansion comes at a turbulent time for federal agents; Federal student loan payments will resume after nearly two years in February 2022, and FedLoan Servicing was one of three federal agents who announced their intention to leave the federal lending space in 2021, causing a massive transfer of accounts from borrowers. To complicate matters further, FedLoan is the only company currently serving PSLF, which underwent an overhaul in October.

A press advisory from PHEAA says the extension of FedLoan’s contract will ensure that the 8.5 million borrowers currently managed by the company are transferred in an “orderly and timely” manner.

How it affects student loans

This contract extension gives FedLoan much more leeway as it shifts its borrowers to new services, especially as it is also working on the implementation of the amended PSLF requirements. Borrowers will also benefit, as many will now avoid the complexity of transferring their loans just before the end of the federal forbearance period.

Over the next year, FedLoan borrowers will move to MOHELA, Navient, Edfinancial or Nelnet. If your loans are currently managed by FedLoan, you will receive advance notifications from FedLoan, the Ministry of Education or your new manager.

Key to take away

FedLoan Servicing has signed a one-year contract extension with the education department and will now service loans until December 2022.

Here’s how to prepare

Whether you’re new to the area of ​​student loans or already in advanced repayment, it’s wise to stay on top of how your student loan rates might change. As 2021 continues, more opportunities for cheaper loans or loan cancellation may open up; Keep an eye on the Bankrate student loan news center for the latest trends.

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