Biden unveils new student debt forgiveness plan

investmentnews.com:

The Biden administration has unveiled a new plan aimed at providing relief to borrowers burdened with student loan debt.

Under the new initiative, more than 800,000 borrowers enrolled in income-driven repayment plans will have their student loans forgiven, totaling a staggering $39 billion in federal student loans, according to a Washington Post report. The Education Department has confirmed the details of this plan.

The focus of the plan is to address the inaccuracies in counting monthly payments made by borrowers. The Education Department had previously acknowledged the flaws in payment counts and had implemented a one-time adjustment last year to rectify the issue. By correcting these past administrative failures, the Biden administration seeks to ensure that all eligible borrowers receive the forgiveness they are entitled to.

Education Secretary Miguel Cardona emphasized the urgency of taking action, highlighting that borrowers have suffered due to a broken system that failed to accurately track their progress towards forgiveness.

“By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve,” Cardona told the Post.

This development follows the Supreme Court’s rejection of a broader student loan forgiveness plan proposed by the administration. The court ruled that the president lacked the authority to implement such a plan, which aimed to forgive up to $20,000 in federal student debt for millions of borrowers meeting specific income limits. In response to the court’s decision, Biden pledged to explore alternative avenues to provide relief to borrowers.

The borrowers who will benefit from this debt cancellation are those enrolled in income-driven repayment plans, which allow