Biden administration cancels $39 bln in U.S. student debt

U.S. President, Joe Biden, cancels $39 billion in student debt for over 804,000 borrowers, addressing a fix to income-driven repayment (IDR) plans, the U.S. Education Department announced on Friday.

Borrowers that have made 20 or 25 years of monthly IDR payments will be eligible for the relief, the IDR programme caps payment requirements for lower-income borrowers and forgives their remaining balance, said the Department.

“These borrowers will join the millions of people that my administration has provided relief to over the past two years, resulting in over $116 billion in loan relief to over three million borrowers under my administration,” Biden stated.

The relief addresses historical inaccuracies in the count of payments, which qualify for forgiveness under IDR plans.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” said Secretary of Education, Miguel Cardona.

The Education Department has launched a regulatory rulemaking process to pursue Biden’s $430 billion loan relief plan, which he had promised after the Supreme Court blocked the plan.

The recent relief is part of a separate payment count adjustment programme that the Biden administration announced in April 2022, the Department added.

“The administration will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt,” said Vice President, Kamala Harris in a statement.

The Education Department’s regulatory rulemaking process is expected to take months.