Congress passed legislation allowing student loans to be forgiven after they are discharged.
What happens next?
The Student Loan Repayment Reconciliation Act of 2018, or SRLAB, would allow for the debt forgiveness of all student loans, including those for students who have completed their undergraduate education or who attended college while on an F-1 visa.
It was signed into law by President Donald Trump on Friday.
But many in Congress, who have long opposed the legislation, are worried it will hurt many students and families.
Here’s what you need to know about SRLab.
What does SRLB do?
The legislation allows forgiveness of student loans that are discharged after three years of payments or when a borrower has paid all or most of the outstanding amount of the debt.
This means that borrowers would not need to pay back their loans as long as they had the money to pay it off.
SRLabs borrowers would also be able to apply for forgiveness once a five-year period, but they would need to submit a letter of intent and financial aid package detailing how the student will repay the loans.
The bill also allows borrowers who have been charged interest or who owe more than $500 to apply to have their student loans forgiven.
It does not allow borrowers who owe less than $250 to have the loans forgiven unless they pay a $250 filing fee.
What are some of the main concerns about the bill?
Lawmakers worry the legislation could have unintended consequences for borrowers who might not be able pay off their loans.
The legislation was passed in the wake of a string of high-profile defaults, including one by Corinthian Colleges, a company that allegedly defrauded thousands of students out of millions of dollars.
Students who had been enrolled at Corinthian were reportedly not allowed to use the company’s online programs or enroll in classes, which caused a loss of hundreds of thousands of dollars for students.
Congress is concerned about the legislation’s impact on borrowers with credit scores under 580.
The federal government uses a three-factor scoring system to determine whether a borrower is eligible for student loans.
According to the federal government, borrowers with a credit score under 580 qualify for loan forgiveness and a one-time payment of $1,000 to the borrower.
Those with a lower credit score are eligible only for a payment of the amount of their debt forgiven.
If SRLA is passed into law, Congress would also have to take steps to ensure students who graduate from college are eligible for federal Pell grants, which are available to low-income students.
The bills is a step forward for borrowers, but the legislation is far from perfect.
It also does not cover all students, and it does not go far enough in addressing the issue of debt forgiveness for students with private loans.
For example, borrowers on federal student loans would still have to repay the full amount of loans they took out when they graduated from college.
Also, students who took out private loans would need a four-year extension from the borrower to have any forgiveness.
For the student who graduated from high school, SRL can also help students who were not eligible for forgiveness due to their race, religion, or other factors.
While the bill has not been passed by the Senate, its path to the president’s desk has not taken long.
President Donald J. Trump signed the bill into law Friday morning, with the support of Senate Majority Leader Mitch McConnell, R-Ky., and Senator Jeff Flake, R -Ariz.