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Biden administration to forgive $39 billion in student debt for 804,000 borrowers

Department of Education Sec. Miguel Cardona said Friday $39 billion in student loan debt owed by more than 804,000 borrowers is being forgiven. Borrowers will be notified in coming weeks. Photo by Michael Reynolds/UPI
Department of Education Sec. Miguel Cardona said Friday $39 billion in student loan debt owed by more than 804,000 borrowers is being forgiven. Borrowers will be notified in coming weeks. Photo by Michael Reynolds/UPI | License Photo

July 14 (UPI) -- The Department of Education said Friday it would begin notifying more than 804,000 borrowers that they will have a total of $39 billion in student loan debt forgiven.

The department said the automatic discharge of the loans in the coming weeks was the result of "fixes" of income-driven payment plans as part of its ongoing effort to give borrowers credit for qualifying payments that were not accounted for.

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"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 statement. "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."

The Department of Education said borrowers are eligible for forgiveness after making 240 or 300 monthly payments -- the equivalent of 20 or 25 years on an IDR plan or the standard repayment plan.

However, inaccurate payment counts have meant that borrowers are losing hard-earned progress toward loan forgiveness.

"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," Cardona said. "This Administration will not stop fighting to level the playing field in higher education."

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Borrowers getting forgiveness notifications in the coming days include those with Direct Loans or Federal Family Education Loans held by the Department (including Parent PLUS loans of either type) who have reached the necessary forgiveness threshold as a result of receiving credit toward IDR forgiveness.

The Education Department will identify and notify borrowers who reach applicable debt forgiveness thresholds every two months until next year when all borrowers who are not yet eligible will have their payment counts updated.

The announcement comes after the U.S. Supreme Court in June blocked Biden's wide-ranging plan to deliver student loan debt forgiveness through the Education Department.

Biden said then that his administration would find a new way to deliver on student debt forgiveness and that his administration was moving "as fast as we can."

In a late Friday statement on the discharge action, Biden criticized Republicans in opposition to student debt relief.

"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," Biden said. "Some are even objecting to the actions we announced today, which follows through on relief borrowers were promised, but never given, even when they had been making payments for decades.

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"The hypocrisy is stunning, and the disregard for working and middle-class families is outrageous," he said.

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