$39B in Student Debt Forgiveness for 800K Borrowers Announced by US Education Department

 $39B in Student Debt Forgiveness for 800K Borrowers Announced by US Education Department

$39B in Student Debt Forgiveness for 800K Borrowers Announced by US Education Department(Image-Getty)

The Education Department announced on Friday that the administration of U.S. President Joe Biden will cancel student debt totaling $39 billion for over 804,000 borrowers. This relief is attributed to a correction made to the income-driven repayment (IDR) plans.

According to the department, borrowers who have made 20 or 25 years of monthly IDR payments will be eligible for debt forgiveness. The IDR program sets a limit on payment obligations for borrowers with lower incomes and forgives their remaining balance after a specific number of years.

In a statement, President Biden expressed that these borrowers will join the millions of individuals who have already received relief during his administration. To date, over $116 billion in loan relief has been provided to more than 3 million borrowers.

The Education Department acknowledged that this relief aims to rectify "historical inaccuracies" in tracking payments qualifying for forgiveness under IDR plans. Secretary of Education Miguel Cardona commented on the flawed system that failed to accurately monitor borrowers' progress toward forgiveness, emphasizing the need to address these shortcomings.

President Biden intends to pursue additional measures to alleviate student loan burdens for Americans, following the Supreme Court's rejection of his plan to cancel hundreds of billions of dollars in debt. The Education Department has initiated a regulatory "rulemaking" process to advance his $430 billion loan relief plan, which is expected to span several months.

The relief announced on Friday is part of a separate program focusing on adjusting the count of payments and was introduced by the Biden administration in April 2022, as stated by the department.

Vice President Kamala Harris affirmed in a statement that the administration will continue its efforts to ensure that Americans can access high-quality postsecondary education without incurring unmanageable student loan debt.