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Income-targeted student loan forgiveness could turn into a 'train wreck'

9 5 0
14.05.2022

President Joe Biden is considering student loan forgiveness, but how much, and for whom? Targeting debt relief to lower-income borrowers is one possibility that’s been floated and presented as politically more palatable than universal forgiveness. But that’s much easier said than done, Politico reports.

It turns out the Education Department doesn’t know the incomes of student borrowers, and therefore couldn’t automatically implement loan forgiveness. Instead, people would have to go through a burdensome process of proving their income levels and applying for forgiveness, and processing all those applications would be a major job—and perhaps an outright disaster—for the agency and loan servicers.

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The Education Department is looking at options for implementing an income test, including having borrowers certify their own eligibility and the agency following up afterward to check, or allowing borrowers to access their IRS data and have it entered into a department application. The latter option, though, leaves out people who didn’t file taxes—probably the........

© Daily Kos


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