Biden forgives $39 billion in student debt for some 800,000 borrowers
President Joe Biden announces new actions on June 30, 2023 to protect borrowers after the Supreme Court struck down his student loan forgiveness plan.
The relief is a result of fixes to the student loan system's income-driven repayment plans . Under those repayment plans, borrowers get any remaining debt cancelled by the government after they have made payments for 20 years or 25 years, depending on when they borrowed, and their loan and plan type.
The Biden administration announced on Friday it would automatically forgive $39 billion in student debt for 804,000 borrowers.
Here's a look at more stories on how to manage, grow and protect your money for the years ahead.
In the past, payments that should have moved a borrower closer to being debt-free were not accounted for, according to the Biden administration.
"For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness," said U.S. Secretary of Education Miguel Cardona.
To bring people over the line for forgiveness, the Biden administration counted payments for borrowers who'd paused their payments in certain deferments and forbearances and those who'd made partial or late payments.
The announcement comes weeks after the Supreme Court struck down President Joe Biden's sweeping student loan forgiveness plan, which would have delivered relief to about 37 million people.
The Education Department will notify eligible borrowers in the coming days.
Source: CNBC
