Biden Administration Erases $39 Billion in Student Loan Debt

This initiative will benefit a total of 804,000 borrowers whose outstanding loans have been burdened for more than two decades.
Stressed student

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Breaking the Chains: Biden Administration Erases $39 Billion in Student Loan Debt.

In a move aimed at providing much-needed financial relief to struggling borrowers, the Biden administration has taken a significant step by wiping out $39 billion in student loan debt. This initiative will benefit a total of 804,000 borrowers whose outstanding loans have been burdened for more than two decades.

The Department of Education spearheaded this relief effort and has been working diligently to rectify administrative errors that hindered some borrowers from qualifying for student loan relief. The errors primarily resulted from inaccuracies in tracking borrowers’ progress toward loan forgiveness. US Secretary of Education Miguel Cardona expressed his sentiments: “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.”

Under this plan, eligible borrowers will be notified of the discharge of their loans in the coming weeks. To be eligible for forgiveness, borrowers are required to have made payments for 20 or 25 years, depending on their specific repayment plan.

Notably, this move by the Biden administration comes shortly after the US Supreme Court’s ruling that struck down the broader $400 billion student loan relief proposal put forth by President Biden. The Supreme Court deemed that the administration had exceeded its authority with the program, which aimed to forgive up to $10,000 per borrower, and in certain cases, up to $20,000.

Despite this setback, President Biden remained determined to find alternative ways to offer student loan forgiveness, asserting that the court’s decision had merely closed one path and they would explore new avenues.

Advocates of student loan borrowers’ rights have welcomed the recent actions by the administration. Abby Shafroth, co-director of advocacy at the National Consumer Law Center, praised the move, emphasizing that Congress has the power to right the wrongs within the student loan system.

It’s worth noting that President Biden has consistently taken steps to provide targeted student loan relief through executive actions since taking office. Last year, he canceled student loan debt for 200,000 borrowers who had been victims of harm or fraud perpetrated by their universities.

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