This Friday, the U.S. Department of Education announced that it will forgive the student loans of more than 800,000 borrowers… who enrolled in income-driven repayment plans.
Borrowers under those repayment plans that have remaining debt, will have it canceled by the government after they have made payments for 20 years or 25 years. Now, to note, this also depends on when they borrowed it and their loan and plan type.
So when will this happen? Well, according to The U.S. Department of Education, it “will begin notifying more than 804,000 borrowers that they have a total of $39 billion in Federal student loans that will be automatically discharged in the coming weeks.”
U.S. Secretary of Education Miguel Cardona also said in a statement, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness. Today, the Biden-Harris Administration is taking another historic step to right these wrongs and announcing $39 billion in debt relief for another 804,000 borrowers.
Cardona added, “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. This Administration will not stop fighting to level the playing field in higher education.”
The Department of Education 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 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.
RELATED: Joe Biden Speaks After Supreme Court Strikes Down His Debt Forgiveness Plan: ‘The Fight Is Not Over’
RELATED: Supreme Court Strikes Down President Biden’s Student Loan Debt Forgiveness Plan
This latest update comes just weeks after the Supreme Court struck down President Joe Biden’s student loan forgiveness plan on June 30.
However, later that day, Biden announced he had a new strategy to reduce people’s balances. “Today’s decision has closed one path,” Biden said during a briefing from the White House. “Now we’re going to pursue another.”
The White House also said at the time,
“In light of the Supreme Court’s ruling this morning, President Biden and his Administration have already taken two steps this afternoon aimed at providing debt relief for as many borrowers as possible, as fast as possible, and supporting student loan borrowers,” the White House said at the time. “The President remains committed to providing relief to low- and middle-income borrowers. For too many Americans, a ticket to the middle class remains out of reach because of unmanageable student loan debt. COVID-19 exacerbated that challenge – risking tens of millions of borrowers’ financial security and futures because of the economic harms brought on by a once-in-a-century pandemic.”