The US Department of Education announced on Friday that it would cancel $39 billion in federal student loans for more than 800,000 borrowers who were enrolled in income-contingent loan repayment plans.
The announcement comes two weeks after the Supreme Court blocked President Biden’s plan to cancel up to $20,000 in loans for borrowers earning less than $125,000 a year.
Friday’s announcement was a continuation of his administration’s efforts to reduce student loan debt through existing policies.
“By fixing past administrative failures, we are ensuring that everyone gets the forgiveness they deserve, just as we have done for civil servants, students who have been deceived by their colleges and borrowers with disabilities. including veterans,” Education Secretary Miguel Cardona said. A declaration.
The Department for Education announced last year that it would make a one-time adjustment to its calculation of the number of months of payments borrowers will make under income-driven repayment plans – in which borrowers pay a small fraction of their discretionary income – should be credited to obtain the cancellation of their debts. Borrowers enrolled in current income-oriented repayment plans are eligible for loan forgiveness after 20 or 25 years of monthly payments, depending on their specific program.
Borrowers eligible for debt cancellation following the adjustment will be notified from Friday.
Vice President Kamala Harris promised in a statement Friday that the White House would not stop fighting to reduce student debt.
She pointed to last month’s announcement that the White House would pursue an alternative path to provide relief through the Higher Education Act following the Supreme Court’s ruling on the president’s plan. The administration also finalized its new income-driven repayment plan, which Harris said would cut monthly undergraduate loan payments in half.
“Our administration will continue to fight to ensure that Americans can access high-quality post-secondary education without carrying the burden of unmanageable student debt,” Harris said.
The Biden administration is expected to launch its revamped earnings-based reimbursement program later this year. In addition to paying less each month, borrowers will see any accrued interest that exceeds their monthly payments forfeited. Borrowers with an initial loan balance of less than $12,000 will have their debt forgiven after 10 years of payments.
Biden’s debt cancellation plan has garnered attention in recent months, but his administration has quietly approved tens of billions in loan releases for borrowers through existing programs such as permanent disability release. , the Civil Service Loan Forgiveness Program for civil servants and the Borrower Repayment Defense Program. for people who believe they have been scammed by their schools.
So far, the administration has approved more than $116.6 billion in debt cancellation for 3.4 million borrowers, according to the Department of Education.
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This story originally appeared in the Los Angeles Times.