The Biden Administration is working to deliver on its student debt relief promise.
According to CNN, on Friday (July 14), the current presidential administration announced plans to erase a reported $39 million in debt for 804,000 borrowers.
The Biden administration just announced it will automatically cancel the education debt for 804,000 borrowers — for a total of $39 billion in relief.
The debt cancellation is a result of the admin’s fixes to repayment plans.
— Kyle Griffin (@kylegriffin1) July 14, 2023
“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 an official statement.
Student Loan Forgiveness
Now, those affected by student loans have a greater opportunity to have their balances wiped completely once they’ve reached “a set forgiveness threshold of 20 or 25 years.”
Already, various income-driven repayment plans (IDRs) are currently available to borrowers with plans based on their income and family size regardless of any outstanding debt.
However, the recent action is a response to “historical failures” and any administrative errors that have inaccurately calculated qualified payments that were made by loanees.
“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 stated.
Working To Make Things Right
Per the Department of Education, people affected have direct loans or Federal Family Education Loans through the department.
As previously reported by AfroTech, student loan repayments were previously paused due to the looming financial effects of the COVID-19 pandemic. Those payments are set to resume in October 2023.
The Department of Education also reports that since taking office, Biden and his administration have greenlit student debt relief for over 3.4 million Americans in the amount of $116.6 billion.
In addition to the move to clear student loans for qualified borrowers, the Department of Education has revealed another initiative to update the federal student loan system to allow Americans to enroll in new IDR plans.
Saving on a Valuable Education, or SAVE, will begin its official rollout in summer 2023 and aims for full implementation over the course of the next year.
Once the latest news begins to take effect, borrowers will not only see their monthly bills get cut in half, but after making at least 10 years of payments, their remaining debt will be canceled.