Over 804,000 student loan borrowers will experience relief in the upcoming weeks as their debt, amounting to more than $39 billion, will be erased due to adjustments in income-driven repayment schemes, declared the Biden administration last Friday.
Education Secretary Miguel Cardona expressed that the system has long been flawed, causing borrowers to be overlooked and not accurately tracking their movement toward debt cancellation.
The alleviation will result from modifications to the income-driven repayment plans by the Department of Education. According to the Biden administration, payments from borrowers who made late, partial, or deferred payments will now be counted. These repayment plans permit the forgiveness of any remaining debt after borrowers have made payments for 20 or 25 years, contingent on the specific plan.
Cardona affirmed that by rectifying prior administrative shortcomings, they guarantee that everyone receives the forgiveness they are entitled to. This plan is consistent with what has been done for public servants, students deceived by their colleges, and borrowers with permanent disabilities, veterans included. He further emphasized the administration’s unwavering commitment to promoting equity in higher education.
The Department of Education revealed that eligible recipients should anticipate notifications in the forthcoming days. Furthermore, borrowers who reach the student loan forgiveness threshold will be identified and informed every two months until 2024, when all payment counts for borrowers should be updated.
Following this announcement, Vice President Kamala Harris expressed that she and President Joe Biden are “committed” to alleviating student loan debt, highlighting her contributions to the issue.
She announced the forgiveness of $39 billion in student loan debt for 804,000 borrowers who have repaid their debts for two decades and should be eligible for relief. Many of these borrowers were unfairly placed into forbearance by loan servicers in violation of regulations, while others were not appropriately credited for their monthly payments.
Harris underscored that addressing these detrimental practices and reducing student loan debt has been a crucial focus throughout her career. As California’s Attorney General, she secured $1 billion for defrauding veterans and students by challenging exploitative for-profit colleges.
The Vice President also assured that the administration will continue its efforts beyond this initiative, highlighting plans further to reduce student loan debt through the Higher Education Act.
This declaration follows the Supreme Court’s decision last month to reject President Joe Biden’s student loan forgiveness proposal, which aimed to wipe out an estimated $400 billion in student loans. Shortly after the highly publicized verdict was rendered, Biden pledged to implement further measures, mirroring his initial promises during the 2020 campaign to alleviate the student debt burden for millions of borrowers.