Biden-Harris Administration Begins Discharges for 804,000 Borrowers with $39 Billion in Automatic Loan Forgiveness as a Result of Fixes to Income-Driven Repayment Plans
Author: US Department of Education | Posted on: August 21, 2023
Discharges are the result of U.S. Department of Education action to provide updated and accurate student loan payment counts under loan forgiveness progress
The U.S.Department of Education today announced that automatic discharges will begin for 804,000 borrowers who qualify for $39 billion in student loan relief as a result of fixes to income-driven repayment (IDR) plans implemented by the Biden-Harris Administration since April 2022. In total, the Biden-Harris Administration has approved more than $116 billion in student loan forgiveness for more than 3.4 million borrowers.
“Today, the Biden-Harris Administration is beginning to discharge loans for 804,000 borrowers who never received the forgiveness they rightfully earned through decades of payments,” said U.S. Secretary of Education Miguel Cardona. “We are standing up for borrowers who did everything right, but whose progress toward forgiveness went uncounted due to past administrative failures that the Biden-Harris team has worked tirelessly to correct. From day one, President Biden has focused on fixing the broken student loan system, and we will not back down or give an inch when it comes to fighting for debt relief for working families.”
The discharges are a result of fixes implemented by the Biden-Harris Administration to ensure all borrowers have an accurate count of the number of monthly payments that qualify toward forgiveness under IDR plans. These fixes, which are the implementation of the payment count adjustment announced by the Administration in April 2022, are part of the Department’s commitment to address historical failures in the federal student loan program. These failures caused qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness to go unaccounted for.
Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months. Borrowers will be notified directly by their servicers via email when their loans have been discharged, and all qualifying loans will be discharged over the coming weeks.
In addition to President Biden’s unparalleled record on providing debt relief to millions of Americans, the Administration has also taken steps to help borrowers access affordable payments going forward. The Department recently issued final regulations creating the most affordable payment plan ever—the Saving on a Valuable Education (SAVE) plan. The SAVE plan will cut payments on undergraduate loans in half compared to other IDR plans, ensure that borrowers never see their balance grow as long as they keep up with their required payments, and protect more of a borrower’s income for basic needs. A single borrower who makes less than $15 an hour will not have to make any payments. Borrowers earning above that amount will save more than $1,000 a year on their payments compared to other IDR plans. Benefits from the SAVE plan will start becoming available this summer.
More information about the discharges can be found here.
State by state breakdown of the discharges can be found in the original article.