Student loan forgiveness: $39 billion in debt relief announced for 804,000 borrowers

The Biden administration on Friday announced that officials will automatically forgive $39 billion of student loan debt for 804,000 borrowers who have been paying back their loans for at least 20 years.

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The relief for borrowers is aimed at addressing “historical inaccuracies” that kept people from getting credit toward forgiveness under income-driven repayment plans. Those affected include people with Direct Loans or Federal Family Education Loans held by the Education Department.

“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 Friday in a statement.

Last year, the Education Department said it would address “historical failures” that kept borrowers from getting credit toward their loans. Borrowers had long complained that because of mismanagement, they did not receive loan forgiveness under the rules of income-driven repayment plans, despite qualifying, NPR reported.

“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 said Friday.

The announcement comes after the Supreme Court last month rejected President Joe Biden’s student loan forgiveness program, which would have canceled as much as $20,000 in student loan debt for individual borrowers, totaling $430 billion. After the decision, Biden vowed to continue working toward student debt relief.

“We’ll use every tool at our disposal,” the president said last month at the White House. “It’s good for the economy. It’s good for the country. It’s going to be good for you.”

The education secretary has since launched a monthslong process aimed at forgiving student debt under the Higher Education Act. Officials have also finalized a repayment plan aimed at lowering costs for borrowers.