More borrowers received the welcome news on Friday that their student loan debt had been forgiven under President Joe Biden's Income-Driven Repayment plan.
The Biden administration launched Income-Driven Repayment Account Adjustment last year in order to fix "longstanding failures in the student loan programs," according to the U.S. Department of Education (DOE) after the Supreme Court struck down the administration's original plan, which would have delivered debt relief to millions of borrowers.
Under an Income-Driven Repayment (IDR) plan, student loan borrowers are able to repay debt without experiencing significant financial hardship. The plan sets monthly payments based on a person's income and family size. Borrowers also are eligible for loan forgiveness after 20 to 25 years of payments under the IDR, depending on their plan.
The IDR plan hit a snag initially when many borrowers who were entitled to forgiveness didn't receive it, as payments that should have counted toward the length of time before their debt was forgiven weren't counted. The fixes to the IDR plans will now ensure that all borrowers have an accurate count of the number of monthly payments that qualify for debt forgiveness. It also means that some borrowers have paid long enough to be entitled to forgiveness of their debt.
Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020. The Department of Education just sent emails to more borrowers who are entitled to student loan forgiveness. Getty
The Biden administration issued the first wave of emails to borrowers who qualified for student loan forgiveness in July, and the second wave of emails were sent by the Department of Education on Friday. Qualified borrowers must have a loan repayment plan under IDR.
"You are now eligible to have some or all of your student loans forgiven because you have reached the necessary 240- or 300-months' of payments under IDR," the email said. "The U.S. Department of Education will work with your servicer to process your IDR forgiveness over the next several months."
The first wave of emails sent in July notified 804,000 student loan borrowers that they had received debt relief, equating to a total of $39 billion. The second wave of borrowers were just alerted to the good news on Friday, but the Education Department has yet to release data on those numbers.
Newsweek reached out to the Department of Education via email for comment.
The Education Department told the borrowers that it would work with the loan servicer to process student debt forgiveness. This process is expected to take several months, according to the department.
IDR Account Adjustment notifications are expected to go out again in November.
xigua22 on September 25th, 2023 at 22:24 UTC »
Who qualifies? People that who have already been paying for 20 years.
When I signed up for the SAVE plan, it was overwhelming seeing my estimated payoff in 2043. Luckily I'm halfway through PSLF, so I only need 5 more years for forgiveness. With SAVE though, my monthly payments went from $350 to $86.
Paying $5,100 over the next 5 years is much better than $21,000.
ElDub73 on September 25th, 2023 at 21:40 UTC »
I love the “screw you we’re doing it anyway” attitude.
QanonQuinoa on September 25th, 2023 at 20:07 UTC »
A couple of weeks ago, two people that go to my gym were saying that they got the remainder of their student loans cancelled that day. Both are nurses.
It’s nice to see a program that genuinely helps improve the lives of people in our community rather than million/billion dollar corporations.
I’m saying this as someone who graduated university student loan free - if you’re in any way upset about this, you’re the problem.