Biden forgives $39 billion in student loan debt via administrative tweaks
The Biden Administration announced Friday that 804,000 federal student loan borrowers would have their loans automatically forgiven, characterizing the move as a "fix" to "administrative failures" with Income-Driven Repayment plans.
The Biden Administration announced Friday that 804,000 federal student loan borrowers would have their loans automatically forgiven, characterizing the move as a “fix” to “administrative failures” with Income-Driven Repayment plans.
Borrowers participating in IDR plans already qualify for debt cancellation after either 20 or 25 years of repayment, depending on varied factors– but the Biden Administration’s tweaks will now more leniently account for the time attributed toward that total.
For instance, “any month in which a borrower was in a repayment status” will now count, “regardless of whether payments were partial or late,” as well as “any period in which a borrower spent 12 or more consecutive months in forbearance.” Months spent in non-in-school deferment will also count.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” U.S. Secretary of Education Miguel Cardona said.
”The forthcoming discharges are a result of fixes implemented by the Biden-Harris Administration to ensure all borrowers have an accurate count of the number of monthly payments that qualify toward forgiveness under income-driven repayment (IDR) plans,” the department announced.
[RELATED: SCOTUS strikes down Biden student loan forgiveness plan]
”These fixes are part of the Department’s commitment to address historical failures in the administration of the Federal student loan program in which qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness were not accounted for,” it added. “Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months.”
This comes just weeks after the United States supreme court blocked Biden’s original student loan forgiveness plan, which would have forgiven $400 billion in federal student loans.
