The corrective measures, announced in April last year as part of the payment count adjustment, represent the department’s commitment to rectifying historical shortcomings in the federal student loan program.
The corrective measures, announced in April last year as part of the payment count adjustment, represent the department’s commitment to rectifying historical shortcomings in the federal student loan program.
The U.S. Department of Education has officially initiated automatic discharges for a whopping 804,000 borrowers, marking a remarkable milestone in the Biden-Harris Administration’s ongoing efforts to reform student loan repayment plans.
Borrowers will collectively receive $39 billion in student loan relief, underscoring the commitment of the current administration to alleviate the student debt crisis, as per a press release.
The move comes as a direct result of critical fixes implemented to income-driven repayment or IDR plans, which have been meticulously rolled out since April 2022.
Since taking office, the Biden-Harris Administration has approved a total of over $116 billion in student loan forgiveness, benefiting more than 3.4 million borrowers across the nation.
This latest wave of discharges highlighted the administration’s dedication to assisting hardworking individuals who, due to past administrative shortcomings, had their progress toward loan forgiveness unfairly hindered.
“Today, the Biden-Harris Administration is beginning to discharge loans for 804,000 borrowers who never received the forgiveness they rightfully earned through decades of payments,” said Education Secretary Miguel Cardona.
“We are standing up for borrowers who did everything right, but whose progress toward forgiveness went uncounted due to past administrative failures that the Biden-Harris team has worked tirelessly to correct,” he added.
These discharges stem from crucial adjustments made by the administration to ensure all borrowers receive accurate credit for the number of monthly payments eligible for forgiveness under IDR plans.
The corrective measures, announced in April last year as part of the payment count adjustment, represent the department’s commitment to rectifying historical shortcomings in the federal student loan program.
These shortcomings had previously caused qualifying payments made under IDR plans that should have contributed to borrowers’ progress toward forgiveness to go unaccounted for.
Eligible borrowers, having amassed the equivalent of either 20 or 25 years of qualifying months, will be notified directly by their loan servicers via email as their loans are discharged. This process is set to unfold over the coming weeks.
In addition to U.S. President Joe Biden’s remarkable record in providing debt relief to millions of Americans, the Administration has proactively taken steps to facilitate affordable payments for borrowers in the future.
The department recently finalized regulations introducing the “Saving on a Valuable Education” plan.
The SAVE plan promises to halve undergraduate loan payments compared to other IDR plans, prevent balance growth for borrowers who meet their payment obligations, and safeguard a greater portion of a borrower’s income for essential needs.
Individuals earning less than $15 an hour will be exempt from making payments, while those earning more will enjoy savings exceeding $1,000 annually compared to other IDR plans.
Benefits from the SAVE plan are slated to become available this summer, providing further relief to the nation’s student loan borrowers.
