Politics & Finances

Biden Administration Cancels Student Debt For 800,000 Borrowers

Biden Administration Cancels Student Debt For 800,000 Borrowers

The Biden administration has made a surprise announcement that student debt will be canceled for over 800,000 borrowers in the United States.

The news comes after President Joe Biden and Vice President Kamala Harris's original student loan forgiveness plan was shot down by the United States Supreme Court. 

NPR reports that this new plan is the "response to years of complaints, lawsuits and an NPR investigation that found that many long-time borrowers who should have qualified for loan forgiveness under the rules of the government's income-driven repayment plans (IDR) hadn't received it because of mismanagement by the department and loan servicers."

Credit: Barry Winiker/Getty Images

IDR regulations have promised that a borrower's loan balance will be forgiven after 20 years of payments, but a March 2021 report uncovered that 4.4 million American borrowers had been making payments for 20 years or more -- but only 32 of those people had successfully had their debt canceled. This was problematic for borrowers on an individual level but also systemically, since these programs were originally designed to help lower-income students receive an education without the fear of making payments for the rest of their lives. 

Last spring, the Biden administration vowed to conduct a one-time assessment of federal student loan borrowers, providing retroactive credit towards loan forgiveness in some cases. Per NPR, certain borrowers who are not currently enrolled in an IDR plan may now receive some relief.

The official White House release notes that eligible borrowers will be granted forgiveness "regardless of whether payments were partial or late, the type of loan, or the repayment plan."

CNBC notes that this new plan will forgive student loan debt for 804,000 borrowers, totaling $39 billion in relief.

This is a breaking story that will be updated.

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Feature Image Credit: Jacquelyn Martin-Pool/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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