Thursday, February 29, 2024

Biden Extends Student Loan Forgiveness to more than 800,000 Borrowers

(Freeimages.com)

WASHINGTON — The Department of Education announced Friday it would begin notifying more than 804,000 borrowers that their Federal student loans, totaling $39 billion, will be automatically discharged.

The action is part of a pledge by the Biden administration, announced in April 2022, to address historical inaccuracies in the count of payments that qualify for forgiveness under income-driven repayment (IDR) plans, the department said.

“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.

It also addresses concerns about loan servicer practices that put borrowers into forbearance in violation of department rules, the Department of Education said.

“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.”

The department said it will continue to identify and notify borrowers who reach the applicable forgiveness thresholds every two months until next year when all borrowers who are not yet eligible for forgiveness will have their payment counts updated.

Eligible borrowers will be informed starting Friday, June 14, if they qualify for forgiveness. No further action is required on their part. Discharges will begin 30 days after emails are sent. Borrowers who wish to opt out of the discharge should contact their loan servicer, according to the Department of Education. Borrowers will be notified by their servicer after their debt is discharged.

Those receiving forgiveness will have repayment on their loans paused until their discharge is processed, while those who opt out will return to repayment once payments resume.

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