The plan is set to benefit an estimated 125,000 Americans through income-driven repayment and Public Service Loan Forgiveness programs.
10/06/2023 2:10 P.M.
1.5 minute read
Last week, President Joe Biden unveiled a groundbreaking new plan for an additional $9 billion in student debt relief, according to a White House press release.
The plan is set to benefit an estimated 125,000 Americans and has been made possible through a series of fixes implemented by the administration, particularly through income-driven repayment and Public Service Loan Forgiveness. Additionally, borrowers with total and permanent disabilities will have their debts cancelled.
In the press release, the administration announced it has approved:
- “$5.2 billion in additional debt relief for 53,000 borrowers under Public Service Loan Forgiveness programs.
- Nearly $2.8 billion in new debt relief for nearly 51,000 borrowers through fixes to income-driven repayment. These are borrowers who made 20 years or more of payments but never got the relief they were entitled to.
- $1.2 billion for nearly 22,000 borrowers who have a total or permanent disability who have been identified and approved for discharge through a data match with the Social Security Administration.”
The Department of Education (DOE) is adding transparency to this initiative by releasing state-by-state totals of debt relief approved under Biden. Additionally, the administration already launched the Student Aid Verification for Everyone (SAVE) program earlier this year, substantially reducing borrowers’ monthly payments and preventing interest from accruing.
“In the wake of the Supreme Court decision on the [a]dministration’s original student debt relief plan, President Biden announced his [a]dministration was pursuing an alternative path to debt relief through negotiated rulemaking under the Higher Education Act,” according to the press release.
The DOE has also formed a negotiating committee to explore solutions for borrowers with outstanding balances exceeding their initial loan amounts, those eligible for relief under existing repayment plans who haven’t yet applied, and those grappling with financial hardship.
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