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Trump Administration Delays Action On Student Loan Forgiveness

After the president was sworn in, many student loan borrowers wondered how Trump’s presidency would deal with the student loan crisis.

The Trump Administration recently proposed its proposition for the higher education budget. Even though it is clear that these proposals could have a significant impact on student loans, experts advised against speculation.

A few months down the line, after the proposal, throngs of former students are left in limbo as they await the final decision. The Trump Administration is in the process of rewriting the Obama rules that had sought to protect students swindled by for-profit colleges.

According to the Department of Education, the new rules have been put on hold until further notice. The loan forgiveness rules were meant to shield students from paying loans gotten from colleges engaging in deceptive practices.

Student Loan Forgiveness Remains Pending

The Education Department has already received 15,000 borrower defense applications this year. The Department reported that $143 million in interest has accrued as these applicants wait for their loans to be forgiven.

The Obama Administration had approved more than 28,000 loan forgiveness applications. Under Trump’s reign, no application has been approved although the US secretary of Education assured borrowers that an expeditious process of discharging these loans is underway.

How To Tell If You Qualify

Under the existing law, it is still possible to apply for a borrower defense federal loan discharge. The following circumstances may help you know if you qualify:

  • Your school gave you misleading information about your loans or education program;
  • The school violated certain state laws related to educational services.

However, you cannot submit a claim for private loans or for costs where you used your own money. The Consumer Financial Protection Bureau is a great place to find out if your school has been a subject of legal action.

How to Apply

Submission details are found at the Federal Student Aid website. You claim will be more valid if there is a detailed explanation of why you qualify. Confirmation of attendance and correspondence with school officials are some of the supporting evidence you might include.

The Effect of Application on Your Loans

Once you have completed submitting your claim, you can request your loans to be placed into forbearance. Even though this action will halt collections and payments, interest will accrue.

As borrowers wait for their applications to be approved, they can put their loans in forbearance. However, the grace period for forbearance is only 6 months.