The Education Department has forgiven another $4.8 billion in student loans for roughly 80,000 borrowers.
It’s the latest tranche of relief to come for Americans who already qualify for debt cancellation through programs such as income-driven repayment and Public Service Loan Forgiveness (PSLF).
About half of the forgiveness, $2.2 billion for about 46,000 borrowers, announced Wednesday came from what the administration referred to as “fixes” to the federal income-driven repayment process, which the department says historically hasn’t counted progress toward forgiveness accurately, leaving borrowers who’ve been paying down their loans for more than two decades unfairly on the hook.
Golden tickets:Student loan debt forgiveness becomes a reality for more than 804,000 who paid for decades
The rest, about $2.6 billion for more than 34,000 borrowers, was for PSLF participants − people working as teachers, public defenders and other public sector jobs − who’ve also had their repayment timelines reassessed in recent months.
The Biden administration first announced in July that it would be adjusting borrowers’ accounts to make them more accurate, providing almost a million borrowers with immediate relief. A Government Accountability Office report last year found that the Education Department needed to do a better job of tracking borrowers’ payments. More than 3.6 million borrowers in total qualify to get at least three more years of payments counted toward their loan forgiveness, the department says. The department plans on notifying those eligible borrowers every other month into next year, according to its website.
“This debt relief is life-changing,” Education Secretary Miguel Cardona said during a call with reporters on Wednesday. “We know there are so many more student loan borrowers who have been failed by this system and still need help.”
Student debt relief enters critical new phase
The Education Department made the announcement as Biden’s “Plan B” to bring student loan forgiveness to millions of Americans enters into a critical new phase.
On Monday, the administration released its latest proposal in a monthslong negotiating effort to produce new regulations that the department hopes have a better chance at passing legal muster after the Supreme Court rebuked Biden’s first student loan relief plan in June. In the proposal, the department zeroed in on helping out longtime borrowers − those who’ve been paying back their loans for two decades and longer − as well as borrowers whose bottom lines have been crippled by interest.
The administration suggested waiving up to $20,000 in debt for low- and moderate-income borrowers whose balances have ballooned past the amount they originally took out. To be eligible for the relief, Americans who are single must make less than $125,000 and be enrolled in income-driven loan repayment plans. Yet even without meeting those qualifications, relief up to $10,000 past borrowers’ original loan amounts could be possible.
Biden made a campaign promise to forgive student loan debt on a wide scale. With that plan upended, the administration has made a point to showcase smaller tranches of forgiveness, which now total $132 billion for several million borrowers.
Latest student debt forgiveness proposalBiden’s plan would help borrowers with old loans, ballooning interest
The agency’s final round of policy negotiations is slated for next week. A major focus will be outstanding questions about how to determine what kinds of “hardships” − chronic illness or bankruptcy, for example − could make borrowers eligible for special relief.
Zachary Schermele is a breaking news and education reporter for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele.
Credit: Source link
