July 15, 2023
President Joe Biden has made it his mission to offer student loan forgiveness. After the Supreme Court shut down his plan to offer $10,000 to $20,000 in relief to eligible borrowers, the country's leader returned to the drawing board to determine a new plan that would benefit the hundreds of thousands of people with debt to pay off.
On Friday, Biden announced his new plan, which will provide loan forgiveness to more than 800,000 people by canceling $39 billion worth of student loan debt.
To be eligible for debt forgiveness, borrowers must have been paying off loans for at least 20 years.
"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 relieving hardworking Americans," Biden said in a media release. "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. The hypocrisy is stunning, and the disregard for working and middle-class families is outrageous."
To qualify for debt cancellation, people must have a payment history of at least 20 years on their loans. The loans that qualify include the Federal Family Education Loan, Education Department loans, and Parent PLUS loans, the New York Times reported. To be eligible, a threshold needs to be met; for some, that could be anywhere from 240 or 300 months on a payment-driven plan. However, it will vary based on the individual's payment plan.
The debt cancellation plan will begin immediately, and borrowers will be notified if they meet the requirements without needing to fulfill any eligibility obligations. An email will be sent to those eligible, and 30 days after receipt, the debt cancellation will begin. The Inquirer reported that Those in the REPAYE will automatically be moved into the SAVE plan.
However, borrowers can contact their loan servicers directly if they want to sign up.
Eligible recipients will have any existing payments paused when the government's three-year pandemic pause ends in October until the debt is eliminated.
"For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness," Education Secretary Miguel Cardona said in a statement. "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."
Over the past two years under the Biden Administration, over $116 billion in loan relief has been provided to over 3 million borrowers.
