Biden administration announces $39 billion student debt forgiveness plan

The US Department of Education will forgive $39 billion in student debt by updating a technical requirement under an existing programme.

The change, announced Friday, will help more than 804,000 borrowers. It comes as the Biden administration pursues alternatives to a $400 billion student loan forgiveness plan that the Supreme Court struck down in June.

The new plan counts more payments toward a forgiveness program that kicks in when borrowers have made the equivalent of either 20 or 25 years worth of payments.

“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.

 

The Education Department said it will begin notifying eligible borrowers Friday and will continue to identify those who reach the threshold for eligibility every month until next year. Qualified borrowers would have made between 240 to 300 total monthly payments, and discharges start within 30 days after email notifications are sent.

After the Supreme Court decision, President Joe Biden said he would attempt another mass debt forgiveness plan using a different legal rationale than the one rejected by the court’s conservative majority.