More than 804,000 student loan borrowers will have their debt cleared in the coming weeks, eliminating more than $39 billion worth of payments due to a fix to income-driven repayment plans, the Biden administration announced on Friday.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a written statement.
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The relief will come via adjustments to the income-driven repayment plans by the Department of Education, the Biden administration now says it will count payments for borrowers who made partial or late payments, deferred payments. The income-driven repayment plans allow borrowers to have their remaining debt forgiven, after they have made payments for 240 or 300 months, depending on the plan.
“By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans. This Administration will not stop fighting to level the playing field in higher education,” Cardona said.
The Department of Education says eligible recipients will receive a notification in the coming days. They also said borrowers who reach the threshold for student loan forgiveness will be identified and notified every two months until 2024, when the agency says all payment counts for borrowers will be updated.
Shortly after the announcement, Vice President Kamala Harris said her and President Joe Biden are “committed” to student loan debt relief, while also touting her own record on the matter.
“President Joe Biden and I are committed to delivering relief to student loan debt borrowers to help them move forward with their lives — whether they want to start a family, buy a home, or become an entrepreneur. Today, we are taking another historic step by forgiving $39 billion in student loan debt for 804,000 borrowers who have been paying down their debts for 20 years or more and should qualify for relief. Instead, many were placed into forbearance by loan servicers in violation of the rules, and others did not get appropriate credit for their monthly payments,” Harris said.
“Addressing these harmful practices and reducing student loan debt has been a priority throughout my career. As California Attorney General, I won $1 billion for defrauded veterans and students by taking on predatory for-profit colleges.”
The vice president also said the administration “will not stop” with this program and said how they are looking to forgive more student loan debt through the Higher Education Act.
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“Our Administration will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt,” Harris said.
The announcement comes after the Supreme Court struck down President Joe Biden‘s signature student loan forgiveness plan last month, which sought to eliminate an estimated $400 billion in student loans. Biden vowed to take additional action shortly after that decision was released, echoing early campaign promises he made in 2020 to ease student debt for millions of borrowers.
