United States President Joe Biden’s administration is set to automatically cancel $39 billion in students debt from over 8,04,000 borrowers as per a report by CNBC.
As per the report published, the relief is a result of the fixes to the students loan system’s income-driven repayment plans. As per the new regulations soon to be implemented, the borrowers will get their debt canceled by the government after they have made payments for 20 years or 25 years. Though the cancellation of loan will depend on factors such as time of borrowing loan, plan type and various other factors.
As per the Biden administration, the payments which should have moved a borrower closer to being debt-free were not accounted for in the past.
US Secretary of Education Miguel Cardona said, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.” as quoted by CNBC.
The Biden administration in the move to bring people over the line for forgiveness, had counted payments for borrowers who had for some reason paused payments in certain deferments and forbearances. The plan has been initiated keeping in mind the borrowers who had made partial or late payments.
The announcement has come a week after US Supreme Court turned down Biden’s sweeping student loan forgiveness plan.
As per the report, the Education Department will be notifying about the eligible borrowers in upcoming days.
