Source: The Washington Post / Getty
President Joe Biden is continuing to work to solve America’s problem with student loan debt, and he just landed a major win!
On Friday, the Biden Administration announced that it plans to automatically forgive $39 billion in student debt for 804,000 borrowers.
As reported by CNBC, the relief comes from fixes to the student loan system’s income-driven repayment plans. Under those plans, borrowers will have their remaining debt canceled by the government after they have made payments for 20 or 25 years. The time frame depends on when they borrowed, as well as their loan and plan type.
According to the Biden Administration, past payments that should’ve moved a borrower closer to being debt-free were not accounted for.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” says U.S. Secretary of Education Miguel Cardona in a statement.
The new plan will count payments for borrowers who’d paused their payment in certain deferments and forbearances. Those who made partial or late payments will also be recognized.
This announcement comes weeks after the U.S. Supreme Court struck down Biden’s initial plan for student loan forgiveness, which would’ve helped 37 million borrowers with relief.
The Department of Education will notify eligible borrowers under this new relief within the coming days.
The new developments came two weeks after the U.S. Supreme Court struck down Biden’s proposed debt forgiveness plans for students who borrowed money to finance their college educations. The panel of conservative-leaning judges on the nation’s highest court voted along ideological lines to defeat efforts championed by Democrats.
The rulings in two cases — Biden v. Nebraska and Department of Education v. Brown — came nearly one year after Biden announced his plan to cancel up to $10,000 for people with federal student loan debt. Biden said his administration would also cancel up to an additional $10,000 for Pell Grant recipients. Borrowers eligible for their debt to be canceled had to earn less than $125,000 annually or $250,000 for married couples who file joint taxes.
But before his plans could go into effect, a federal appeals court issued a temporary stay in response to a motion filed by Republicans who claimed the debt forgiveness was unconstitutional. The case then went all the way up to the Supreme Court, culminating in its ruling on June 30.
SEE ALSO:
What’s Next For Student Loan Debt Relief In America?
The Student Freedom Initiative Is Saving HBCU Students From Debt
Biden Administration To Forgive $39 Billion In Student Debt For More Than 800K Borrowers was originally published on foxync.com
