Student loan forgiveness seems to be one of the few topics many Americans across the nation can agree on, and it looks like President Biden is listening to the general public loud and clear.
The Biden-Harris Administration recently announced that changes are being made to student loan programs that will result in 40,000 borrowers having their student debt immediately wiped.
U.S. Secretary of Education Miguel Cardona said in a statement on the matter, “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,” also adding, “Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plans.”
Newsweek reports that the lucky 40,000 will see their debts cancelled under the Public Service Loan Forgiveness Program. Under the PSLF, those eligible include government and nonprofit worker like teachers, health care workers, and military members after completing 10 years of qualifying loan payments. In addition to them, thousands of borrowers with older loans will also receive IDR forgiveness and 3.6 million more can expect to see IDR forgiveness a whole three years earlier than expected.
More on this groundbreaking news below, via Newsweek:
“This is happening because the latest plan ultimately aims to remedy the “historical failures” within IDR programs by focusing on several key issues. One of those issues includes ending “forbearance steering,” which occurs when borrowers are placed into forbearance by loan services without being told about alternative options, such as IDR, which makes it easier to pay back loans and avoid accruing hefty interest.
To fix the current system, the education department said it will now count forbearances of more than 12 consecutive and more than 36 cumulative months toward forgiveness under both IDR and the PSLF programs. It will also better track the payments of borrowers enrolled in IDR and conduct a one-time revision of their payments to address any past inaccuracies.
Additionally, under the new guidance, if the agency determines a person should be credited and qualifies for student loan forgiveness, they will receive it automatically.”
Stats show that only 32 people out of millions of eligible borrowers have seen their loan canceled through the IDR program since it first began 25 years ago. As of April 6, student loans payments have for the moment been frozen until Aug. 31, 2022, and it’s expected for the White House to make a larger decision regarding debt cancellation also by the end of the summer.
In the words of our good man Donny Hathaway, someday we’ll all be free. We’ll keep you updated on the matter until then.
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