The Biden administration announced on Friday that it will eliminate $39 billion in student loan debt for 804,000 borrowers.
This action is a result of improvements made to the federal student loan system’s income-driven repayment plans, which forgive certain borrowers’ debt after 20 or 25 years of payments.
In the past, issues with the program caused qualifying payments to not count towards forgiveness, according to the administration.
“At the beginning of this Administration, many borrowers had earned loan forgiveness but had not received it. That is unacceptable,” said Education Department Under Secretary James Kvaal in a statement. “Today, we are fulfilling the promise we made to borrowers who have spent decades repaying their loans.”
Eligible borrowers will begin receiving notifications on Friday informing them of their eligibility for forgiveness, the Department of Education stated.
“The Department will continue to identify and notify borrowers who meet the forgiveness criteria (240 or 300 qualifying monthly payments, depending on their repayment plan and loan type) every two months until next year, when all borrowers who are not yet eligible for forgiveness will have their payment counts updated,” the department explained.
President Joe Biden has consistently pledged to reduce student loan debt in the United States, even after his comprehensive student loan forgiveness plan was struck down by the Supreme Court last month. The plan would have forgiven up to $20,000 in student loan debt for over 40 million borrowers.