12,720 student loan borrowers in Alabama eligible for relief under new Biden plan

More than 12,000 Alabamians are eligible for student loan forgiveness under President Biden’s new income-drive repayment plan.

The Department of Education began notifying impacted 804,000 borrowers last week they were eligible for automatic relief. Combined, some $39 billion in student loans will be forgiven including $553 million owed by Alabama borrowers.

Residents of Texas, California and Florida are in line for the most student loan forgiveness at $3.1 billion, $3 billion and just under $3 billion, respectively.

The announcement comes after the Supreme Court struck down Biden’s larger debt forgiveness plan that would have wiped out up to $20,000 in debt for federal loan holders. Under the new IDR Account Adjustment plan, borrowers will be credited for past loan periods that didn’t previously count towards their payments.

IDR plans are designed to provide loan forgiveness for borrowers after 20 or 25 years of repayment, or sooner for those in the Public Service Loan Forgiveness program.

Eligible borrowers were notified by the Department of Education starting last Friday and no further action on their part is required. Discharges of the debt will begin 30 days after those emails were sent and additional notifications are ongoing.