More than 804,000 borrowers will have federal student loans automatically discharged in the following weeks, a total of $39 billion.
The discharges come as part of fixes by the Biden-Harris Administration to give borrowers an accurate count of monthly payments qualifying toward forgiveness under income-driven repayment (IDR) plans. This comes as an effort from the Department of Education (ED) to rectify failures in which qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness were not accounted for.
“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 Dr. Miguel A. 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. This Administration will not stop fighting to level the playing field in higher education.”
Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months. ED will notify those who reach forgiveness thresholds every two months, until next year when borrowers not yet eligible for forgiveness will have payment counts updated.