New student loan forgiveness plan: $39 billion forgiven for 804,000 borrowers, Biden announces
A new student loan forgiveness plan will cover some $39 billion held by more than 804,000 borrowers, the Biden administration announced Friday.
Eligible borrowers will be notified in the coming days.
“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 in a statement reported by CNBC. “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.
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“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 loan forgiveness is expected to cover some of those who have been paying through income-driven repayment plans that typically allow debts to be forgiven once they’ve been paid for 20 or 25 years, depending on the plan. Because of errors in tracking payments, however, some borrowers have been left paying beyond their end dates.
The announcement comes after the Supreme Court struck down Biden’s broader $430 billion debt forgiveness plan that would have covered about 37 million people. That plan would have wiped away up to $20,000 in student loan debt for borrowers with federal loans.