The Biden administration announced Friday that it would automatically forgive student loans for over 800,000 borrowers.
The Story: The Education Department’s action is a result of a “fix” to income-driven repayment plans, expected to total $39 billion in federal student loan forgiveness.
- “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a statement.
- “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve,” he added.
- Cardona added the action will address administrative issues in the income-driven repayment system.
Going deeper: Under the plans, federal student loan borrowers are eligible for forgiveness after 20 or 25 years of payments.
- Friday’s move is the latest to fulfill President Joe Biden’s promise to provide millions of Americans with debt relief.
- Since Biden took office, the administration has approved over $116.6 billion in student debt relief for more than 3.4 million Americans, according to the Department of Education.
Why it matters: The news comes two weeks after the Supreme Court struck down Biden’s student loan forgiveness program for debt for 43 million federal student loan borrowers.
- Biden’s plan would have provided $20,000 in one-time federal student debt relief for those struggling to repay their loans.
- “I’m never going to stop fighting for you. We’ll use every tool at our disposal to get you the student debt relief you need and reach your dreams. It’s good for the economy. It’s good for the country,” Biden said last month.