Department Confirms Intent To Retain Debt-To-Income Ratio For Economic Hardship

Abstract:

On Dec. 3 the Department confirmed its intent to retain the current debt-to-income ratio pathway for borrowers to qualify for an economic hardship deferment in both the FFEL and Direct Loan programs. Many in higher education - mostly from the medical field - expressed concern that students would no longer qualify for an economic hardship deferment during the period between when the debt-to-income ratio provisions were eliminated by the College Cost Reduction and Access Act (CCRAA) and the implementation of the new income-based repayment plan in July 2009. This confirmation resolves these concerns by assuring that debt-to-income ratio will still be used as a factor in approving economic hardship deferments.

The full article was originally published in NASFAA’s Today’s News on 12/18/07.