Biden Administration Forgives $39 Billion in Student Loan Debt.
July 14, 2023: In a recent announcement, the Biden administration revealed that it had forgiven a staggering $39 billion in student loan debt for 804,000 borrowers enrolled in income-driven repayment plans. This relief comes as a result of fixes made by the government to these plans, aiming to address historical inaccuracies and ensure accurate tracking of borrowers’ progress toward forgiveness.
Qualifying borrowers will be notified in the coming weeks if their loans will be discharged, offering significant financial relief. The Department of Education has taken steps to rectify the failures of the broken system that failed to account for borrowers’ payments accurately, ultimately preventing them from qualifying for loan forgiveness.
The forgiveness applies to borrowers who have paid for 20 or 25 years, depending on their specific repayment plan. The US government offers various income-driven repayment plans, where borrowers make monthly payments based on their income over 20 or 25 years.
This recent action follows the US Supreme Court’s ruling that struck down President Biden’s broader student loan forgiveness plan. The court found that the administration had exceeded its authority with the proposed plan, which aimed to cancel billions of dollars in student loans for over 40 million Americans. However, the administration remains committed to finding alternative ways to offer student loan forgiveness, as President Biden pledged to explore new paths after the court’s decision.
It is worth noting that President Biden has already taken several steps to provide relief to smaller groups of borrowers through executive actions since taking office. For instance, he canceled student loan debt for 200,000 borrowers who had suffered harm or fraud at the hands of their universities.
Moving forward, the Biden administration continues its efforts to alleviate the burden of student loan debt. While the Supreme Court ruling presented a setback, the recent forgiveness of $39 billion demonstrates the administration’s commitment to finding solutions and providing debt relief for American borrowers.
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