U.S. President Joe Biden’s administration has announced plans to forgive $39 billion in student debt for over 804,000 borrowers. The Education Department states that the relief is a result of adjustments made to the income-driven repayment (IDR) plans. This move aims to address historical inaccuracies in the count of payments qualifying for forgiveness under IDR plans.
Secretary of Education Miguel Cardona expressed his concern over a broken system that failed to accurately track borrowers’ progress towards forgiveness. He stated, For far too long, borrowers fell through the cracks.
To be eligible for forgiveness, borrowers must have made either 20 or 25 years of monthly IDR payments. The IDR program sets a cap on payment requirements for lower-income borrowers and forgives the remaining balance after a specific number of years.
President Biden had initially proposed canceling hundreds of billions of dollars in student loan debt, but the Supreme Court blocked this plan. However, the Education Department has launched a rule-making process to pursue his $430 billion loan relief plan, which is expected to take several months.
It’s important to note that this $39 billion debt relief falls under a separate program that the Biden administration had announced in April 2021. This program involves adjusting the count of payments made by borrowers.
U.S. Vice President Kamala Harris reaffirmed the administration’s commitment to providing access to high-quality postsecondary education without burdening individuals with unmanageable student loan debt.
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