(Scypre.com) – The U.S. Department of Education made an announcement on Friday, revealing its intention to inform over 804,000 borrowers that a total of $39 billion in Federal student loans will be discharged automatically in the near future.
U.S. Secretary of Education Miguel Cardona expressed his concerns about a flawed system that had failed to accurately track borrowers’ progress towards forgiveness. He stated that the Biden-Harris Administration is taking significant action to correct these issues by providing $39 billion in debt relief to an additional 804,000 borrowers.
Cardona further emphasized the administration’s commitment to rectifying past administrative failures and ensuring fairness in higher education, as they have done for public servants, students deceived by their colleges, and borrowers with permanent disabilities, including veterans.
According to the Department of Education, these forthcoming discharges are the result of corrective measures implemented by the Biden-Harris Administration to ensure borrowers’ accurate count of qualifying monthly payments under income-driven repayment plans.
The department acknowledged historical failures in the administration of the Federal student loan program, where qualifying payments made under income-driven repayment plans were not properly considered. Borrowers become eligible for forgiveness after accumulating the equivalent of 20 or 25 years of qualifying monthly payments.
The department also stated that it will continue identifying and notifying borrowers who reach the applicable forgiveness thresholds every two months until next year, ensuring their payment counts are updated. This process applies to all borrowers who are not yet eligible for forgiveness.
Vice President Kamala Harris expressed her and President Biden’s commitment to providing relief to student loan borrowers, enabling them to progress in their lives, whether it be starting a family, purchasing a home, or becoming an entrepreneur.
Additionally, she mentioned that the administration is pursuing an alternative path through the Higher Education Act to deliver relief and finalized a new income-driven repayment plan that reduces monthly payments by 50% for undergraduate loans. The administration intends to ensure that Americans can access high-quality postsecondary education without facing overwhelming student loan debt.
This announcement follows a Supreme Court ruling two weeks ago that prevented the Biden administration from proceeding with its student loan debt relief program. In a 6-3 decision, the court determined that federal law does not grant the education secretary the authority to cancel over $430 billion in student loan debt.
In response to the ruling, President Biden expressed determination to find alternative ways to provide relief to hard-working middle-class families, despite the setback.
His student loan initiative, which was temporarily halted due to the litigation, aimed to offer up to $10,000 in debt relief (up to $20,000 for Pell Grant recipients) to individuals earning less than $125,000 annually. The program was projected to cost the government over $400 billion.