Latest news with #DepartmentOfEducation
CNET
9 hours ago
- Business
- CNET
Yes, You Can Still Get Student Loan Forgiveness With IBR. What You Need to Know
Zooey Liao/CNET/Getty Images Student loan forgiveness options have dwindled considerably during President Donald Trump's second administration, but the Department of Education says forgiveness through Income-Based Repayment isn't going away. However, it is on pause. The Federal Student Aid website says IBR forgiveness is on hold while the Education Department retools its system to recalculate eligible payments. "IBR forgiveness will resume once those updates are completed," said an FAQ section updated July 9. The key question is how the Education Department counts payments made under the Saving on a Valuable Education repayment plan, which was struck down by the courts earlier this year. Borrowers on the IBR can have the payments they made on other income-driven repayment plans (including SAVE, PAYE and ICR) count toward their IBR forgiveness. But one of SAVE's features allowed borrowers to count months in certain types of forbearance when they didn't make payments, according to student loan expert Mark Kantrowitz. "The decision of the 8th Circuit Court of Appeals blocks these additional deferments and forbearances from counting toward forgiveness," he said in an email. "So the US Department of Education will need to make changes to the qualifying payment counts." IBR is an income-driven student loan repayment plan that adjusts monthly payments based on borrowers' income. Eligible student loan borrowers can receive forgiveness after 20 or 25 years' worth of payments, depending on when they took out their loan. It's currently the only repayment plan available that offers a path to forgiveness to existing borrowers. We'll explain what could happen with IBR, and what you should do if you're waiting for student loan forgiveness. Read more: SAVE Student Loan Borrowers: You Don't Have to Move to IBR by Aug. 1, but You May Want to: Here's How to Decide Is student loan forgiveness going away? Multiple paths to student loan forgiveness have disappeared in the past year. ICR, PAYE and SAVE plans are no longer eligible for forgiveness directly, following the court ruling in February that Congress exceeded its authority by approving them. Since IBR was created under a different rule, it wasn't affected by the court's ruling. Forgiveness through IBR should be safe for now. But it's understandable that borrowers -- deciphering confusing and misleading information as they wait for forgiveness -- may be skeptical of the Education Department's reassurances that IBR forgiveness is coming back. After February's court decision, the application for income-driven repayment plans was removed from the federal student loan site, causing concern among borrowers. But it was made available again a month later with revisions. This could, in theory, be a similar scenario, where the IBR forgiveness will resume at a later date. When will IBR forgiveness come back? Though the Education Department calls it "temporary," there's no indication how long the IBR pause will last. With a backlog of 1.5 million applications for repayment plans and huge swaths of the Department of Education staff wiped out, it's unclear how long it could take to resolve the payment recalculation. The Washington Post reported that several student loan servicers have said the Education Department hasn't asked them to process loan forgiveness for any borrowers since mid-January. "This not only affects the loan servicers, but also the US Department of Education, since final approval of loan forgiveness is handled in-house," Kantrowitz said. The Department of Education didn't immediately respond to a request for comment. Are there other options for forgiveness besides IBR? Besides IBR, existing borrowers will have another option next year under the new Republican-backed law passed earlier this month: the Repayment Assistance Plan. The new Repayment Assistance Plan could offer slightly lower monthly payments for some borrowers, but the plan calls for 30 years of qualifying payments before loans are forgiven, compared with the 20 to 25 years under the current IBR. So you'll end up paying more in interest over time. Anyone who takes out student loans after July 2026 will have just two repayment options: RAP and the standard repayment plan. Should I still apply for IBR if I'm a SAVE borrower? Millions of borrowers enrolled in SAVE will start accruing interest on their loans again starting Aug. 1. However, payments remain on hold while your loans are in a general forbearance, which could last until mid-2026. You aren't required to switch plans until then, although interest will pile up during that time. However, if you decide to switch, you can compare other income-driven repayment plan options using the Federal Student Aid loan simulator. You can apply to switch to an IDR on the FSA website to restart payments that count toward forgiveness. If you do apply for a new plan, expect the application to take several months to process due to the backlog, Kantrowitz said. The Department has been encouraging SAVE borrowers to switch to IBR, which could mean an even higher volume of applicants as the Aug. 1 deadline approaches. What should I do if I'm enrolled in an IBR? If you're enrolled in an IBR and near or past the payment threshold to be eligible for loan forgiveness, Kantrowitz advises you to continue making payments until you receive notification that your loans have been forgiven, which should happen automatically. "Any excess payments will be refunded," he said. "They could switch into a general forbearance, but there's a risk that they've counted their qualifying payments incorrectly. It is better to just continue making payments."
The Independent
10 hours ago
- Politics
- The Independent
Why schools could be forced to close in US
Democratic and Republican lawmakers are urging the Trump administration to release nearly $6 billion in frozen federal education funding. The Department of Education initially withheld $6.9 billion on 30 June, stating the funds had been "grossly misused to subsidise a radical left-wing agenda." While $1.3 billion was released for after−school programme s on 18 July, $5.5 billion remains in limbo, causing significant concern among school districts. School districts across the US, including those in Florida and Alaska, are facing potential cuts and closures due to the ongoing delay in funding. Lawmakers argue that withholding these funds contradicts the President's stated aim of returning K-12 education control to individual states.
Forbes
12 hours ago
- Politics
- Forbes
Billions In Education Funding Remains Frozen, Despite Efforts Of GOP Senators
Still unavailable to the states On July 1, instead of funding, U.S. schools received an unsigned email from the Department of Education stating that the government would not be distributing funds for five grant programs. On July 16, 10 Republican Senators asked the Office of Management and Budget to reconsider, but as of this week, only $1.4 billion of the $6.8 billion total has been released. The email from the department indicated that the five programs were paused for review. Funding for the programs was approved and allocated by Congress in March, but the OMB has frozen the funds. The letter, addressed to OMB director Russell Vought, called for the administration to end the withholding of funds, arguing in terms of the Trump administration's stated priorities. The decision to withhold this funding is contrary to President Trump's goal of returning K-12 education to the states. This funding goes directly to states and local school districts, where local leaders decide how this funding is spent, because as we know, local communities know how to best serve students and families. However, an OMB spokesperson told Newsweek: Initial findings show that many of these grant programs have been grossly abused to promote a radical leftwing DEI agenda, subsidize the Open Border Crisis, and in many cases, directly violate Presidential Executive Orders. Again, the 10 senators struck a conciliatory tone: We share your concern about taxpayer money going to fund radical left-wing programs. However, we do not believe that is happening with these funds. One of the programs that the letter cited specifically is the funding for after- and before-school sessions. On July 18, the OMB indicated that the review of that program was completed and the funds would be released--provided the receiving states certify that they will follow the administration's interpretation of civil rights law, according to Mark Liebreman at Education Week. On July 21, a coalition of school districts, teacher groups, and a PTA group sued the administration in an attempt to have the rest of the funds released. With weeks left before school starts a new year, many districts are scrambling to come up with either program cuts or outside funding sources that will compensate for the withholding of federal funds. ABC News reported that Alaska Republican Sen. Lisa Murkowski said she's worried the Trump administration's federal education actions could mean "closing schools" in her home state. The Department of Education is referring questions of funding to the OMB, which has not specified a timeline for decisions about the rest of the funding. It appears that the letter from the senators has exhausted its effects. The 10 GOP senators who signed the letter include Shelley Moore Capito (WV), Susan Collins (ME), John Boozman (AR), Katie Britt (AL), Deb Fischer (NE), John Hoeven, (ND), Jim Justice (WV), Mitch McConnell (KY), Lisa Murkowski (AK), and Mike Rounds (SD).
Fox News
14 hours ago
- Politics
- Fox News
Chicago Public Schools agrees to pay feds back $1 million over misallocated grants
FIRST ON FOX – The Chicago Public Schools district and the Department of Education (ED) reached an agreement to pay back over $1 million after issues arose when the district reported their Native Indian student population when applying for federal grants. Documents obtained by Fox News Digital show that the ED's Office of Inspector General found that Chicago Public Schools were counting South Asian students from Myanmar, Pakistan and Nepal as Native Americans to receive additional federal funding. The repayment of funds is not considered a fine because the amount owed by the school district resulted from an agreement between the school district and the ED. Chicago Public Schools officials received federal funding from the Indian Education Formula Grant, which provides educational and cultural programming to students of Native American and Alaska Native Ancestry. The American Indian Education Program, managed by Chicago Public Schools' Office of Language and Cultural Education, received an annual grant from the ED's Office of Indian Education – the program's primary subsidy. In order to obtain funds, the Office of Indian Education would allocate an amount based on the total number of students enrolled in Chicago Public School's American Indian Education Program. Students are required to be of Native American ancestry. The case first opened in 2021, when the ED Office of Inspector General (OIG) reviewed data from Chicago Public School's student database showing over 1,000 students who identified as Native American. The investigation highlighted that several students' surnames indicated that they were of South Asian ancestry, specifically natives of India, Myanmar, Bangladesh, Nepal, and Pakistan. In 2024, the OIG investigation concluded the program manager and school district "intentionally" submitted and certified false information to the federal government for years. Chicago Public Schools' reporting of the information resulted in about $140,000 more federal funds than they were entitled to during the 2022-2023 and 2023-2024 school years. The ED investigation discovered further that hundreds of thousands of undeserved federal funding was granted to the district prior to 2022. The investigation estimated a total of more than $1.1 million in misallocated funds over the past decade. The Chicago Public School District is already facing enrollment struggles, budget woes, and had tensions with the teachers' union during their contract negotiations. The school district told Fox News Digital that at no point did CPS officials misidentify students by race or ethnicity. Contrary to what the OIG report states, CPS officials claimed there was no misclassification of South Asian students as American Indian. They also said they worked closely and cooperatively with the ED's Office of Indian Education to "review past practices and implement a stronger, more accurate system for collecting voluntary tribal enrollment information." "This includes clear protocols for verifying tribal membership through federally-recognized documentation from the student, parent, or grandparent through a voluntary process at each school," the spokesperson added. "The District is also enhancing training, data collection, and engagement efforts through the CPS Office of Multilingual-Multicultural Education (OMME), the Office of Family and Community Engagement (FACE), and other departments that work with Native families." CPS officials told Fox News Digital that ED's Office of Indian Education has commended them for "ongoing cooperation and for proactively addressing these issues." CPS said they will not apply for the American Indian Education grant for Fiscal Year 2026 to proceed with caution and to ensure full compliance in the future. "CPS has agreed to repay funds to the federal government because the District could not fully verify historical documentation related to the collection and submission of data confirming the identification of American Indian students as part of the District's application for the American Indian Education grant," the spokesperson said. However, an ED spokesperson who sent Fox News Digital the documents accused CPS of "knowingly submitting and certifying false information about their student population." Reacting to the CPS statement, the ED spokesperson doubled down, referring to the OIG investigation which "found that CPS's American Indian Education Program, at the direction of Program Manager (redacted), has continued to submit false program enrollment on federal grant applications in 2022, 2023, and 2024, even after OIG reported in 2021 that (redacted) and the AIEP have been significantly misstating program enrollment data on grant applications for several years."
Fast Company
15 hours ago
- Business
- Fast Company
A popular student loan forgiveness plan was just paused, with no word on when it will start up again
It's no secret that the Trump administration has taken steps to limit student loan repayment options. Now, individuals on the Income-Based Repayment (IBR) plan will experience a temporary halt in forgiveness, the Department of Education (DOE) announced —well, if you can call slipping a note into its FAQ section an announcement. 'Currently, IBR forgiveness is paused while our systems are updated to accurately count months not affected by the court's injunction,' the DOE states under a tab about processing IDR forgiveness. 'IBR forgiveness will resume once those updates are completed.' However, it notes that loan forgiveness under the IBR is still being processed. It's unclear when the program will start back up again. Fast Company reached out to the DOE for comment. According to Axios and CNN, about two million individuals are reportedly enrolled in the IBR plan. The Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans are also paused. SAVE can't be saved This month has also marked the end of the fight to rescue former president Joe Biden's Saving on a Valuable Education (SAVE) plan. Trump's so-called big, beautiful bill states that it must cease by July 2028, but it was already on its last legs. In February, an appeals court sided with a Republican-backed lawsuit that argued the Biden administration didn't have the authority to create it in the first place—hence the injunction referenced in the DOE's pause announcement. Individuals enrolled in the SAVE plan have been in an interest-free forbearance for over a year. Now, the roughly eight million borrowers on the SAVE plan will see interest accrue starting August 1. According to Student Aid, forbearance will continue 'until the legal situation changes or servicers are able to send bills to borrowers at the appropriate monthly amount.'
