Biden Admin Announces Student Loan Forgiveness for 804,000 Borrowers via $39 Billion 'Fix'
The Biden administration is now going to forgive $39 billion in federal student loans for over 800,000 borrowers.
The Department of Education made the announcement in a Friday news release.
The department said the forthcoming discharges are a result of “fixes” made by the Biden 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.”
IDR plans are designed to make student loan debt more manageable by determining monthly payments based on the borrower’s income and family size.
Borrowers are eligible for relief if they have made 20 or 25 years’ worth of monthly payments under such a plan. The news release said 804,000 borrowers will be notified of loan forgiveness in the coming weeks.
Secretary of Education Miguel Cardona said the move addresses a “broken system.”
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Cardona said.
“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.”
The announcement comes after the Supreme Court struck down Biden’s plan to cancel even more student loan debt in June.
By a vote of 6-3, the justices said the Biden administration overstepped the powers granted to it by the Constitution when it announced it would cancel $400 billion in student loans last year.
Biden said in a statement after the court’s decision that he would “stop at nothing to find other ways to deliver relief to hard-working middle-class families.”
That “other way” turned out to be the Higher Education Act, which was signed by President Lyndon B. Johnson in 1965 and allows the education secretary to “compromise, waive or release” student loans.
Vice President Kamala Harris said in a statement that she and Biden will “not stop” at forgiving $39 billion in student loan debt.
“President Joe Biden and I are committed to delivering relief to student loan debt borrowers to help them move forward with their lives — whether they want to start a family, buy a home, or become an entrepreneur,” she said.
“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.”
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