U.S. Department of Education to forgive $39 billion in student debt with new plan

The U.S. Department of Education will forgive $39 billion in student debt by counting more payments toward a forgiveness program that kicks in when borrowers have made the equivalent of either 20 or 25 years worth of payments.

The change will help more than 804,000 borrowers and serves as an alternative to the $400 billion student loan forgiveness plan that the Supreme Court voted down in June.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” said U.S. Secretary of Education Miguel Cardona. “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. This Administration will not stop fighting to level the playing field in higher education.”

According to a statement released on Friday, President Joe Biden is planning another mass debt forgiveness plan using a different legal rationale than the one rejected by the court’s conservative majority.

“At the start of this Administration, millions of borrowers had earned loan forgiveness but never received it. That’s unacceptable,” said Under Secretary James Kvaal. “Today we are holding up the bargain we offered borrowers who have completed decades of repayment.”  

In total, the Biden-Harris Administration has approved more than $116.6 billion in student loan forgiveness for more than 3.4 million borrowers.

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