Biden Administration Announces Plan to Provide Debt Relief to 800,000 Federal Student Loan Borrowers

The Biden administration announced on Friday a plan to provide debt relief to more than 800,000 federal student loan borrowers with $39 billion in debt. This comes two weeks after the Supreme Court invalidated the Biden administration’s plan for broad-based student loan forgiveness, which would have helped more than 40 million borrowers each erase up to $20,000 in debt.

Under the new plan, borrowers are eligible for forgiveness after 20 or 25 years of payments, depending on the plan. The Department of Education said it will begin notifying borrowers today about the automatic discharge of their debt, which will occur in the next few weeks.

The Department of Education also noted that some borrowers may have had qualifying payments that “should have moved borrowers closer to forgiveness were not accounted for.” To address this, the Department of Education said it will review the accounts of borrowers who may have been affected and will provide additional debt relief if necessary.

The Biden administration is also working on improving income-driven repayment plans (IDRs), which are designed to reduce student loan payments for those who are struggling financially. The Department of Education said it is committed to helping borrowers manage their student loan debt and will continue to work on ways to provide relief.