President Joe Biden just made a quiet but significant change to his student loan handout.
Just the News reports that Biden has now decided to exclude from his student loan handout borrowers with privately held loans.
It was in August that President Joe Biden announced his student loan handout, which he has ordered through executive action alone.
Under Biden’s student loan handout, a federal student loan borrower could receive up to $10,000 in forgiveness or up to $20,000 if the borrower is a Pell Grant recipient. All that is required is that the borrower is currently making less than $125,000 if single or less than $250,000 if married.
More information about Biden’s student loan handout can be found on the U.S. Department of Education’s federal student aid webpage.
The latest guidance
On this webpage, one can find guidance about who is and is not eligible for the federal student loan handout. Recently, this guidance was suddenly updated to exclude borrowers who have federal student loans that are not held by the Education Department.
The Hill reports:
The department said only borrowers in the Federal Family Education Loan (FFEL) Program whose loans are held by the federal government are eligible. The FFEL Program, which stopped issuing loans in 2010, was a student loan system that had private banks manage the loans but were guaranteed by the federal government.
It is estimated that more than 4 million student loan borrowers have a privately held FFEL.
On the webpage, the Biden administration goes on to state that it is “assessing whether there are alternative pathways to provide relief to borrowers with federal student loans not held by ED, including FFEL Program loans and Perkins Loans, and is discussing this with private lenders.”
But, the big question is “Why?”
Why did the Biden administration, all of a sudden, exclude this group of federal loan borrowers from Biden’s student loan handout?
As of yet, the answer remains unclear. But, the New York Post suggests that it is “at least partly because the Bidenites fear legal action, and excluding these borrowers might make it harder for anyone to successfully sue to stop it.”
Whether or not this is the reason, it’s becoming more and more clear that Biden’s student loan handout is little more than a midterm election gamble designed to try to win the Democrats some votes.