The Education Department said the proposed rule would benefit those with medical bills, child care costs, and other financial hardships.
The U.S. Department of Education said on Oct. 25 that new a set of rules, if finalized, would cancel student loan debts for about 8 million borrowers facing “financially devastating hardships,” even as a court order blocks its implementation.
The Education Department defines hardship as an event or situation “likely to impair the borrower’s ability to fully repay the loan or render the costs of continued collection of the loan unjustified.” Examples of eligible hardships include unexpected medical bills, high child care costs, caregiving expenses for chronically ill family members, or severe financial losses from the impact of natural disasters.
Under the proposal, borrowers with eligible hardships would have two paths to the bailout. In the first, the Education Department could provide a…
