Biden unveils $39B student loan forgiveness for 800K+ borrowers.

The Biden Administration Announces $39 Billion Student Loan Forgiveness Plan

The Biden administration has made an exciting announcement regarding student loan forgiveness. In an effort to address the “administrative failures” that have hindered relief for borrowers under income-driven repayment plans, a $39 billion plan has been unveiled. This plan aims to provide debt relief to 804,000 borrowers.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” said U.S. Secretary of Education Miguel Cardona. “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.”

“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.”

An income-driven repayment plan is designed to set affordable monthly payment amounts for student loan borrowers based on their income and family size.

There are four available plans that calculate payment amounts ranging from 10 to 20 percent of the person’s discretionary income. Payments can even be as low as $0.

Debts are forgiven once payments have been made for 20–25 years or “after making 240 or 300 monthly payments,” depending on the plan. The 804,000 borrowers who have received relief are part of this repayment plan.

Officials have discovered that loan borrowers were unknowingly paying beyond their payment end-dates due to administrative oversight in tracking payments. This has resulted in borrowers losing progress towards loan forgiveness.

The education department is now taking action to rectify this error in repayment plans. The estimated amount of $39 billion will be automatically discharged in the coming weeks.

Additionally, the department will continue to identify and notify borrowers who reach the forgiveness thresholds every two months until next year. This will ensure that all borrowers who are not yet eligible for forgiveness have their payment counts updated.

According to the statement, the Biden-Harris Administration has already approved over $116.6 billion in student loan forgiveness for more than 3.4 million borrowers.

SCOTUS Ruling and Biden Counter

On June 30, the Supreme Court made a significant ruling regarding the Biden student loan forgiveness program. To learn more about this ruling, click here.