The U.S. Department of Education said Friday that more than 804,000 borrowers will be notified that more than $39 billion in Federal student loans will be automatically forgiven in the coming weeks.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” U.S. Secretary of Education Miguel Cardona said in a statement Friday. “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,” Cardona added. “This Administration will not stop fighting to level the playing field in higher education.”
“These fixes are part of the Department’s commitment to address historical failures in the administration of the Federal student loan program in which qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness were not accounted for,” the statement continued. “Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months.”
The announcement comes just two weeks after the Supreme Court ruled that the Biden administration’s plan to forgive student loan debt was unconstitutional.
The Supreme Court ruled 6-3 that the Biden administration cannot use executive power in order to cancel up to $10,000 in student loan debt for non-Pell Grant recipients and up to $20,000 for Pell Grant recipients.
The Biden administration’s decision to offer student debt forgiveness to millions of Americans circumvented Congress’ constitutional right to make laws on spending, the Supreme Court ruled, according to Reuters.
By ruling against Biden’s original plan, the Supreme Court has shaved off $400 billion from the deficit, saving taxpayers about $30 billion annually for the next decade, according to the CRFB.
“I will stop at nothing to find other ways to deliver relief to hard-working middle-class families,” Biden said in a statement after that decision was made.
“The Department will continue to identify and notify borrowers who reach the applicable forgiveness thresholds (240 or 300 qualifying monthly payments, depending on their repayment plan and type of loan) every two months until next year when all borrowers who are not yet eligible for forgiveness will have their payment counts updated,” the statement said Friday.
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