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today’s news for Thursday, September 22, 2022

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NEWS FROM NASFAA

The House on Wednesday cleared the Joint Consolidation Loan Separation Act that would allow for joint consolidation loans to be split into two Direct Loans and enable borrowers to become eligible for certain student debt relief programs. Specifically, the legislation would permit borrowers who previously consolidated their student loan debt with a spouse to submit an application to the Department of Education (ED) to split their loan into two separate federal Direct Loans, split proportionally based on the percentages that each borrower originally brought into the loan.

A new analysis from the White House provides details on how the administration’s student debt relief plans will impact borrowers on a state-by-state basis, with more than 40 million borrowers identified as eligible for cancellation. The fact sheet, according to the Department of Education (ED), is based on Census data used to estimate borrower income, and thus their eligibility for student loan cancellation.

NASFAA UPDATES AND ANNOUNCEMENTS

Yes, as long as the consolidation loan actually resolved the overpayment that existed at the time. Guidance from the Volume 4, Chapter 3 of the FSA Handbook states that if a student has consolidated the loan(s) that exceeded the annual or aggregate loan limit, the student is considered to have made satisfactory arrangements to repay the debt and no further action is required. View the full answer to this question to learn more.

The Resumption of Loan Repayment Task Force has begun its work to explore the impacts of the loan repayment moratorium on students, borrowers, and institutions as we approach the end of the pandemic-related pause that has been in effect since March 2020. The group will give thought to what schools and financial aid administrators should be considering now in preparation for payments to resume in January 2023, with a particular focus on institutional policies and procedures, and will discuss best practices for helping students and borrowers transition successfully back into repayment. This diverse 12-member task force, chaired by Anthony Jones from the University of Utah, represents all six regions and includes five first-time task force members. Read more about their work in the task force charter and explore other volunteer opportunities.

U.S. DEPARTMENT OF EDUCATION

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