Some people with those plans, however, have struggled to get credit for all of those payments. The borrowers involved in these plans for forgiveness include those with Direct Loans or Federal Family Education Loans held by the department, including Parent PLUS loans.Ī longstanding option for student loan borrowers has been to enroll in a payment plan that aligns payments with their income. "Today we are holding up the bargain we offered borrowers who have completed decades of repayment." That’s unacceptable," Education Department Undersecretary James Kvaal said. "At the start of this administration, millions of borrowers had earned loan forgiveness but never received it. The Biden administration said last year that it would make a one-time adjustment to borrowers’ payment histories to ensure they are getting all the credit they should.
I have student debt: What to know after Supreme Court strikes down loan forgiveness The how and why of new relief The outstanding debt, worth about $39 billion, is what’s left of these borrowers’ loans after the equivalent of 20 to 25 years' worth of payments.Īlthough the Biden administration took a hit last month when the Supreme Court undid its plan for large-scale student loan forgiveness – the now-defunct proposal would have forgiven debt for more than 40 million borrowers – the announcement Friday is the latest in a stream of messages touting the many ways it has helped people escape their student debt. A tweak to how the federal Education Department calculates student loan payments, intended to correct past errors, means about 804,000 people will have the balance of their loans erased over the next few months.
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