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Monday, April 22, 2024

Biden administration to forgive $39 billion in student loans

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The U.S. Education Department has announced that it will forgive loans for thousands of borrowers.

Over 804,000 people will have their loans automatically forgiven to fix what the Department of Education has referred to as “administrative failures.” Around $39 billion worth of federal student loans will be automatically discharged.

According to the Department of Education, the move is to remedy a failure around the income-driven repayment plans. Under that plan, borrowers should have been eligible for forgiveness after accumulating either 20 or 25 years of qualifying months. This new measure aims to adjust borrowers who would have been “closer to forgiveness” but 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,” said U.S. Secretary of Education Miguel Cardona in a press release. “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.”

Biden’s initial plan to forgive student loans was recently struck down by the Supreme Court. That plan would have forgiven up to $10,000 in federal student loans for most eligible borrowers and up to $20,000 for Pell Grant recipients, and it would have cost an estimated $400 billion.

After that plan was struck down, Biden vowed to find additional ways to provide borrowers relief and criticized Republicans for blocking his attempts.

“Republican lawmakers—who had no problem with the government forgiving millions of dollars of their own business loans—have tried everything they can to stop me from providing relief to hardworking Americans,” said President Biden in a statement. “Some are even objecting to the actions we announced today, which follow through on relief borrowers were promised but never given, even when they had been making payments for decades. The hypocrisy is stunning, and the disregard for working and middle-class families is outrageous.”

Organizations like the NAACP have pushed Biden to follow through on mass student loan forgiveness despite the setback from the Supreme Court. The Biden administration’s latest plan for broader student loan forgiveness involves using the Higher Education Act as opposed to the HEROES Act, but it remains to be seen if this approach will survive a legal challenge.

Contact Indy Kids Winning Reporter Andrew Pillow at andrewp@indyrecorder.com. Follow him on Twitter @AndrewPillow.

Andrew’s work is supported through a partnership between Indy Kids Winning and the Indianapolis Recorder. Visit indykidswinning.com to learn more.

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