Tampa Student Loan and Bankruptcy Attorney Blog — February 26, 2023
Turns out yes. I just read a pretty cool story in the New Yorker about a 91 year old lady, perfectly healthy, obtained a full forgiveness under a “compromise and settlement authority” provided for under the Higher Education Act of 1965. Although it is a last ditch effort as there are many other ways to obtain forgiveness now.
There is an easier way. The IDR Waiver program will allow for someone like this to consolidate their older federal loans to Direct Loans (provided this is done before May 1, 2023), and after 20 years of repayment all undergrad loans would be forgiven. 25 years for grad loans. I believe this lady would have qualified for that as well – although I don’t have access to her loan history to know for certain.
But if you miss that May 1 deadline, or the IDR Waiver, TPD, BDTR or PSLF don’t fit your circumstances for some reason, then this is a way out – used mostly when the Department of Education believes it would be more costly to collect the loan, or when it cannot locate the original promissory note.
Perhaps this would be good for folks living out of the country. For a long time. Presently, ED doesn’t chase them down to my knowledge. It would clear the threat of litigation by the Department of Justice. It would also end a nagging threat of pulling someone’s U.S. passport – this doesn’t happen for defaulted federal student loan debt now, but the IRS keeps sticking it’s hand out as it currently is required to notify the State Department for unpaid tax debt. I wonder if there will be a time where ED does the same, and it results in a U.S. passport loss, preventing exit from the States.
Don’t ignore student loan debt. It can have far reaching results – but if steps are taken now during this Administration, perhaps this debt can be cleared and allow you a fresh start!
