The Biden administration announced Friday that 804,000 borrowers will have their student debt wiped away, totaling $39 billion worth of debt, in the coming weeks due to fixes that more accurately count qualified monthly payments under existing income-driven repayment plans.
“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.
There are currently several different kinds of income-driven repayment plans for borrowers with federal student loans, which base payments on a borrower’s income and family size – regardless of their total outstanding debt. After reaching a set forgiveness threshold of 20 or 25 years, a borrower’s remaining balance is then wiped.
“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,” Cardona added in the statement.
Friday’s action addresses “historical failures” and administrative errors that miscounted qualifying payments made by borrowers, according to the Department of Education. Those borrowers affected will include Americans with Direct Loans or Federal Family Education Loans held by the department.
With student loan repayments resuming in October after a yearslong pause during the pandemic, Friday’s action is the latest announcement from the administration to fulfill President Joe Biden’s promise to provide millions of Americans debt relief and continues efforts that have already resulted in more debt being canceled during his tenure than any other president.
Since Biden took office, his administration has approved $116.6 billion in student debt…
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