KEY POINTS
- The Biden administration is opening the Paycheck Protection Program to student loan borrowers who’ve fallen behind on their payments.
- Previously, a delinquency or default on an applicant’s record could disqualify them for the government-subsidized loans.
- Around a third of federal student loan borrowers are in delinquency or default.
Struggling student loan borrowers who own a business received some welcome news this week: They will no longer be excluded from the Paycheck Protection Program.
Any business owned 20% or more by a borrower who had fallen behind on their payments previously could be determined ineligible for the government-subsidized loans. The funds are aimed at keeping small businesses afloat during the upsets of the Covid pandemic and can later be forgiven.
Starting in March, a delinquency or default on a student loan record should not disqualify an applicant. The change is one of the reforms to the program announced by the Biden administration this week, along with priority access for businesses with 20 or fewer employees.
Outstanding student loan debt in the U.S. has eclipsed credit card and auto debt, with more than 42 million Americans owing loans for their education. Around a third of borrowers are in delinquency or default.