On Tuesday, the Biden Administration announced that 40,000 borrowers of student loans would become eligible for discharge under the Public Service Loan Forgiveness program and that 36 million more people will move closer towards forgiveness. The income-driven repayment program (IDR) will make it easier for borrowers to have debts forgiven after being required to pay for 20 or 25 years.
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In a statement released by U.S. Secretary of Education Miguel Cardona, he said that “student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for.” He also added that the move will begin to “remedy years of administrative failures” and that the administration was committed to bringing “meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively.”
The changes announced will help those who borrow federal student loans and did not get accurate information regarding repayment options from their loan servicers. It is meant to remedy issues of those who were forced into forbearance (allows for a temporary stop in payments) rather than be enrolled in an IDR plan.
The Department of Education will also be performing a one-time account adjustment that will count time spent in forbearances of more than 12 consecutive months or for more than a cumulative of 36 months towards the IDR and Public Service Loan Forgiveness program (PSLF cancels debt for eligible public sector workers who make qualifying monthly payments after 10 years).
