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today’s news for Wednesday, August 17, 2022

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NEWS FROM NASFAA

The Department of Education (ED) announced on Tuesday it would cancel $3.9 billion worth of federal student loans owed by former students of ITT Technical Institute (ITT), a for-profit college that shut down in September 2016.  

On Friday, NASFAA submitted comments to the Department of Education (ED) on a package of proposed regulations that was negotiated in late 2021 related to college affordability and student loans. This is the third in a series of three articles that will be published this week to delve into the details of the proposal. Today’s article will focus on Public Service Loan Forgiveness (PSLF) and interest capitalization. 

The vast majority of federal student loan borrowers have left their balances untouched since March 2020, with only 10.3% of balances decreasing since the initial implementation of the repayment pause and interest accrual, according to new data. An update published this week from the Federal Reserve Bank of New York comparing repayment statuses at the end of 2019 to 2021 shows it is possible that even fewer borrowers have been using the pause to pay down their loan balances.

NASFAA UPDATES AND ANNOUNCEMENTS

With payments and interest on federal student loans paused since the start of the COVID-19 pandemic in March 2020, student loan borrowers haven’t been required to make payments for more than two years. At some point, borrowers will be required to resume making payments. This transition will have significant impacts on borrowers, some of whom entered repayment status during the pause and thus have never had to make a loan payment before; it will also significantly impact schools, which are held accountable for their students’ successful loan repayment. This task force will give thought to what schools and financial aid administrators should be thinking about now in preparation for borrowers transitioning back into repayment on federal student loans. Read the full task force charter and, if interested, apply to volunteer by Friday, August 26.

U.S. DEPARTMENT OF EDUCATION

NASFAA TRAINING

NASFAA CAREER CENTER


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