The Biden administration announced Friday that will wipe out a total of $39 billion in federal student debt for more than 800,000 borrowers.
The Department of Education said that the loan forgiveness is the result of administrative fixes made to properly account for qualifying payments in income-driven repayment plans. The administration says that some prior payments were not properly accounted for, impeding borrowers’ progress in qualifying to have their debt discharged.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a statement. “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 says that until next year it will continue to identify and notify borrowers who hit the forgiveness thresholds, which stand at 240 or 300 qualifying monthly payments depending on the loan and repayment details.
The latest plan comes two weeks after the Supreme Court struck down President Biden’s controversial action to forgive up to $20,000 in debt for millions of borrowers. Biden promised to pursue additional debt relief measures after the court ruling. His administration says it has now approved nearly $117 billion in student loan forgiveness for more than 3.4 million borrowers.
Federal student loan payments, which have been paused because of the pandemic, are set to resume in October.
