In a reversal, the Education Department is now excluding millions from student loan relief

Federal student loan borrowers whose loans are not held by the U.S. Department of Education will no longer be able to consolidate in order to qualify for President Joe Biden’s student loan forgiveness program, according new guidance from the department.

The update on the Education Department’s guidance for the one-time student loan debt relief is an about-face from previous guidelines, which said those borrowers could consolidate their debts to Director Loans in order to qualify for the relief.

Biden announced plans for sweeping student loan forgiveness in August. That includes...