Hey All-
Today's action: Retweet THIS, THIS, THIS, And THIS.
Breaking News:
The Department of Education issued a fact sheet today stating that they are going to count past payments made by federal loan borrowers (who worked at a qualifying non-profit) with ANY KIND of federal loans, and ANY TYPE of repayment plan towards the Public Service Loan Forgiveness Program (PSLF).
This is significant, if true. If you've been hoping/expecting to get PSLF, I strongly recommend you read the memo very carefully. They have set an Oct 31, 2022 deadline (for various purposes) that you want to be aware of.
We'll have more to say about this in the coming weeks, but a few initial points to be made:
1. Talk is cheap. The Department of Education has made all manner of promises and commitments over the years, and has found ways to not honor them. There are a myriad of elements to this memo that still give the Department all manner of avenues to NOT cancel loans, as they have done at every step of the way in the past. There are also some other potential tricks in this that need to be explored.
2. This is clear and unassailable evidence that the Secretary of Education can, indeed, waive, compromise, and release (ie cancel) loans without explicit approval from Congress.
3. THE ENTIRE LENDING SYSTEM IS STILL TOTALLY FAILED. If everything promised in this statement came true, and a half million people got their loans cancelled, that would still leave 45 MILLION PEOPLE with federal student loans, 80% of whom were either not paying, or paying but with increasing loan balances BEFORE THE PANDEMIC.
4. There is going to be a strong inclination for many to consolidate their loans into the Direct Program as a result of this memo. This could be dangerous with regards to bankruptcy protections, since the legislation we currently have has a ten-year waiting period associated with it, and creating a new loan may well reset that ten-year clock.
We'll have more to say on all of this soon. In the meantime, this is no time to be celebrating. We need to fight harder than ever to ensure that this isn't used as a political cover by the Department to continue to wreck the citizenry under this unconstitutional, nationally threatening lending program.
Regards,
Alan