President Joe Biden announced on June 30, 2023, new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan. In response to this setback, the Biden administration revealed that it would automatically forgive $39 billion in student debt for 804,000 borrowers.
This relief is made possible through fixes to the student loan system‘s income-driven repayment plans. Under these plans, borrowers are eligible to have any remaining debt cancelled by the government after making payments for either 20 or 25 years, depending on when they borrowed and their loan and plan type.
The Biden administration acknowledged that in the past, payments that should have contributed to a borrower’s progress towards debt forgiveness were not properly accounted for. U.S. Secretary of Education Miguel Cardona stated, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.”
To rectify this issue and ensure borrowers receive the forgiveness they deserve, the Biden administration included payments made during certain deferments, forbearances, and partial or late payments in the calculation. This adjustment aims to bring more borrowers over the line for forgiveness.
The announcement comes in the wake of the Supreme Court’s decision to strike down President Biden’s comprehensive student loan forgiveness plan, which would have provided relief to approximately 37 million individuals.
In the coming days, the Education Department will notify eligible borrowers about the automatic forgiveness of their student debt. This news brings hope to many struggling borrowers and demonstrates the Biden administration’s commitment to addressing the challenges faced by those burdened with student loans.
What impact will the inclusion of payments made during specific deferments, forbearances, and partial or late payments have on the number of borrowers eligible for student loan forgiveness
President Joe Biden made an exciting announcement on June 30, 2023, regarding new measures to protect borrowers who were left disappointed after the Supreme Court struck down his student loan forgiveness plan. Determined to support those burdened with student debt, the Biden administration unveiled a plan to automatically forgive $39 billion in student loans for 804,000 lucky borrowers.
This incredible relief became possible through important adjustments to the income-driven repayment plans within the student loan system. These plans offer eligible borrowers the chance to have any remaining debt canceled by the government after making payments for either 20 or 25 years, depending on their loan and plan type as well as when they borrowed.
The Biden administration recognized that previous flaws in the system had failed borrowers by not properly accounting for payments that should have helped them progress toward debt forgiveness. U.S. Secretary of Education, Miguel Cardona, admitted, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.”
To rectify these issues and ensure borrowers receive the forgiveness they rightfully deserve, the Biden administration has included payments made during specific deferments, forbearances, and even partial or late payments in the calculation process. This adjustment aims to bring a larger number of borrowers over the threshold for forgiveness.
This announcement comes in the aftermath of the Supreme Court’s decision to strike down President Biden’s comprehensive student loan forgiveness plan, which would have provided relief to an estimated 37 million individuals.
In the upcoming days, the Education Department will notify eligible borrowers about the automatic forgiveness of their student debt. This news is sure to bring much-needed hope to countless struggling borrowers and clearly demonstrates the Biden administration’s unwavering commitment to addressing the challenges faced by those burdened with student loans.
This is great news for countless students burdened by hefty loan debts. The automatic forgiveness of $39 billion in student debt is a significant step towards alleviating financial strain and allowing individuals to focus on their futures. Kudos to the Biden administration for prioritizing this important issue.
“Finally, some relief for struggling student loan borrowers! This move by the Biden administration to automatically forgive $39 billion in student debt is a step in the right direction towards addressing the student debt crisis. It’s a much-needed lifeline for those burdened by college loans, providing an opportunity for financial freedom and a chance to reinvest in their futures.”