In a statement released on Friday, the U.S. Department of Education said it would “begin notifying more than 804,000 borrowers that their combined federal student loan balances of $39 billion will be immediately discharged in the coming weeks.”
In a statement, U.S. Secretary of Education Miguel Cardona said that “for far too long, borrowers fell between the gaps of a dysfunctional system that failed to maintain proper track of their progress towards forgiveness.” The Biden-Harris administration announced today that additional 804,000 borrowers will receive $39 billion in debt relief as part of another historic move to remedy these wrongs.
“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. “This Administration will not stop fighting to level the playing field in higher education.”
The Biden-Harris Administration’s modifications to guarantee that all borrowers receive an accurate tally of the number of monthly payments that qualify for forgiveness under income-driven repayment (IDR) plans led to the upcoming discharges, according to the Department of Education.
This was followed by a statement that said, “These fixes are part of the Department’s commitment to addressing historical failures in the administration of the Federal Student Loan Program, in which qualifying payments made under IDR plans that should have brought borrowers closer to forgiveness were not accounted for.” If a borrower has accrued the equivalent of 20 or 25 years’ worth of qualifying months, they are eligible for forgiveness.
“The Department will continue to identify and notify borrowers who reach the applicable forgiveness thresholds (240 or 300 qualifying monthly payments, depending on their repayment plan and type of loan) every two months until next year when all borrowers who are not yet eligible for forgiveness will have their payment counts updated,” it also said.
Whether they want to have a family, purchase a home, or launch their own business, vice president Kamala Harris and President Joe Biden “are committed to bringing relief to student loan debt holders to help them go forward with their lives,” she said.
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“We will not stop there,” she added. “Last month, President Biden announced we are pursuing an alternative path to provide relief through the Higher Education Act, and we finalized our new income-driven repayment plan – which will cut monthly payments in half for undergraduate loans. 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.”
The announcement comes two weeks after the Supreme Court ruled that the Biden administration cannot go forward with its student loan debt handout program.
In a 6-3 decision, the court held that federal law does not allow the secretary of education to cancel more than $430 billion in student loan debt.
“The Secretary’s plan cancelled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600,” Chief Justice John Roberts wrote for the majority.
“I will stop at nothing to find other ways to deliver relief to hard-working middle-class families,” Biden said in a statement after that decision was made.
The federal government would provide up to $10,000 in debt relief — and up to $20,000 for Pell Grant recipients — for Americans who make less than $125,000 annually under Biden’s student loan proposal, which had been put on hold due to litigation. The government was anticipating spending more than $400 billion on the programme.