U.S. President Joe Biden’s administration will cancel $39 billion in student debt for more than 804,000 borrowers, the Education Department said on Friday, describing the relief as the result of a “fix” to income-driven repayment (IDR) plans.
Borrowers will be eligible for forgiveness if they have made either 20 or 25 years of monthly IDR payments, the department said. The IDR program caps payment requirements for lower-income borrowers and forgives their remaining balance after a set number of years.
The department said the relief addresses what it described as “historical inaccuracies” in the count of payments that qualify toward forgiveness under IDR plans.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Secretary of Education Miguel Cardona said.
Biden has said he will pursue new measures to provide student loan relief to Americans after the Supreme Court blocked his plan to cancel hundreds of billions of dollars in debt.
The Education Department launched a regulatory “rulemaking” process to pursue his $430 billion loan relief plan. That process is expected to take months.
Friday’s relatively smaller relief falls under a separate, payment count adjustment program that the Biden administration announced in April last year, the department said.
(Reuters)