Trump Education Dept RESUMES Loan Forgivness

While the Education Department did not respond to requests for comment, several student loan servicers — the companies that collect payments on the government’s behalf — confirmed that the department alerted them to the pending cancellations this week.

About 2 million people are enrolled in the IBR plan, but not all have made enough payments to qualify for forgiveness.

IBR, created in 2007, is one of four federal plans that tie monthly payments to earnings and family size with the promise of loan forgiveness after 20 or 25 years of payments — the equivalent of 240 or 300 monthly payments.

According to emails shared with The Washington Post, the Education Department said borrowers have until Oct. 21 to opt out. After that date, the discharges will be processed for most eligible borrowers within two weeks, but it could take longer for some borrowers, the notification said.

The emails come at a critical time for borrowers. A provision in the 2021 American Rescue Plan that prevents canceled student loans from being taxed is set to expire Dec. 31. That means many borrowers whose loans are forgiven after that date could be in for a hefty tax bill. The tax changes do not apply to people in the Public Service Loan Forgiveness program, which cancels loans of government and nonprofit employees after 10 years of service and 120 monthly debt payments.

The looming deadline and the months-long suspension of loan forgiveness led the American Federation of Teachers to ask a federal judge last month to force the Education Department to end what it called a “unwarranted and unlawful” delay. The union also petitioned the court to force the department to process the nearly 75,000outstanding requests from public servants — workers such as teachers and nurses — seeking to “buy back” time spent in forbearance because of ongoing litigation against the Biden-era repayment program known as Save. AFT argues that for some public servants, the buyback program is crucial to hitting the required number of payments needed to achieve loan forgiveness….

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