Biden administration announces $39 billion in student debt relief for 804,000 borrowers
BOSTON - The Department of Education (DOE) announced Friday that it would right the wrong for more than 800,000 people by honoring their earned student loan forgiveness.
The federal department will automatically cancel education debt for those in the income-driven repayment plans to the tune of $39 billion.
The programs, designed for low-income and service-based borrowers, promised to eliminate remaining student loan debt after 20 years of consecutive payment. The DOE acknowledged it was not always keeping track.
"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.
The issue was realized during the Trump Administration and the DOE had been looking into ways to fix its systems since.
Jay Zagorsky is a senior lecturer at Boston University's Questrom School of Business. "This is the Biden Administration being a little bit more generous with people who are disabled, people who are veterans, people who are doing public service jobs that we need," said Zagorsky. "These are people who have actually been paying for many years. They might not have been paying the full amount on their loans because they were on a low-income payment plan, but still they had large amounts of debt overhanging their financial statements for a very, very long time."
The DOE started notifying eligible borrowers on Friday by email. Debt is said to be wiped from accounts automatically within 30 days of notification.