U.S. President Joe Biden, joined by Education Secretary Miguel Cardona, speaks on student loan debt in the Roosevelt Room of the White House August 24, 2022 in Washington, DC. (Photo by Getty Images)
The Biden administration announced that it will be cancelling a total of $39 billion in student debt, affecting around 804,000 borrowers. Today, the Department of Education has started notifying 804,000 student loan borrowers that they will have $39 billion in Federal student loans automatically discharged in the coming weeks.
The Department of Education announced on Friday that the relief will be provided through income-driven repayment plans. The Biden administration explained that the federal government will cancel any remaining balance for the borrower once they have made their payments for 20 or 25 years.
The Department of Education said that any borrowers that will be eligible for the aid will be notified in the upcoming days. The new relief plan comes after the Supreme Court had struck down President Joe Biden’s previous plan which would have given $10,000 in student debt relief to low- and middle-income borrowers, and up to $20,000 for Pell Grant recipients. On June 30, the court had ruled, 6-3, that federal law does not allow the president to cancel federal student loan debt, which was roughly around $430 billion. After the ruling, President Biden had announced that he will be taking additional steps in order to circumvent the decision and be able to provide the relief.
The new plan was based on the Higher Education Act which the Biden administration argues allows the Secretary of Education to “compromise, waive or release” student loan debt. U.S. Secretary of Education Miguel Cardona released a statement saying that the current administration is taking a “historic step” by providing the aid. “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Cardona said. “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.” Vice President Kamala Harris said that the current administration is “committed” to providing the relief to borrowers.
“Our Administration will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt,” the Vice President said in a statement. The administration will have to undergo a public comment period before they are able to implement the new plan.
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