Today Biden announced his new plan to eliminate $39 billion for student borrowers...
From CNN
The Biden administration announced Friday that 804,000 borrowers will have their student debt wiped away, totaling $39 billion worth of debt, in the coming weeks due to fixes that more accurately count qualified monthly payments under existing income-driven repayment plans.
“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 written statement.
There are currently several different kinds of income-driven repayment plans for borrowers with federal student loans, which base payments on a borrower’s income and family size – regardless of their total outstanding debt. After reaching a set forgiveness threshold of 20 or 25 years, a borrower’s remaining balance is then wiped.
“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 in the statement.
While not part of today’s actions, the Department of Education is also moving ahead with a separate and significant change to the federal student loan system that will enable Americans to enroll in a new income-driven repayment plan.
Once the plan is fully implemented, people will see their monthly bills cut in half and remaining debt canceled after making at least 10 years of payments
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