The U.S. Department of Justice released new guidance on how to discharge student loans in the Biden administration’s student loan program.
Department of Justice released new guidance to Discharge student loans. (Photo: CNET)
New Guidance on How to Discharge Student Loans
The Biden administration attempted to forgive up to $20,000 in student loans but a federal judge in Texas struck down this program. Recently, the U.S. Department of Justice released new guidance on how to discharge student loans of borrowers.
In a published article in CNN News, borrowers who want to discharge student loans can do it through bankruptcy. They need to prove that they are unable to pay the debt and this will cause them undue hardship. This will make it easier for the borrowers for their debts to be discharged.
Even though this legal requirement needs an act of Congress but the new guidance is in close coordination with the Department of Education. They aim to simplify the process of showing “undue hardship” and will make it easier for the lawyers to recommend to the court to discharge student loans., according to a report in Yahoo News.
READ ALSO: $500 Cash Assistance Pilot Program For 24 Months In Iowa Kicks Off; Eligibility
Views on Discharging Student Loans
Associate Attorney General Vanita Gupta said, “Today’s guidance outlines a better, fairer, more transparent process for student loan borrowers in bankruptcy. It will allow Justice Department attorneys to more easily identify cases in which we can recommend discharge of a borrower’s student loans.”
Moreover, the guidance released on Thursday to discharge student loans came just one week after the federal student loan forgiveness program was struck down by a federal judge in Texas, FORBES reports. However, the Department of Justice has already appealed the decision of the judge.
Furthermore, the borrower needs to submit their income information to the government to prove “undue hardships” and to discharge student loans.
READ ALSO: $100 Direct Payments Americans Can Claim From $17.5billion Pot Of New York State’s Unclaimed Funds
