It was revealed on Tuesday that the U.S. Department of Education will forgive 40,000 people’s student loans and grant 3.6 million more credits to assist low-income borrowers and public servants.
A statement issued by the Department of Education stated that “student loans were never supposed to be a life sentence, but it’s definitely felt that way many borrowers locked out of debt relief they’re eligible for.”
Joe Biden’s administration also paused practically all student debt collection, but the new measures don’t go far enough to satisfy progressive Democrats’ demands for full student loan forgiveness.
A guarantee of over $400 billion was made by Biden when he ran for president in 2020, calling for the cancellation of each borrower’s student loan debt of at least $10,000. The White House has repeatedly urged Congress to take action on student loan relief since he was elected.
“Historical failings” to explain to borrowers all the benefits they were qualified for in federal student loan programs were addressed by the government, it was said. The Public Service Loan Forgiveness (PSLF) Program will eliminate the debt of at least 40,000 people.
Another 3.6 million borrowers will earn at least three years of additional credit toward IDR forgiveness, the Education Department said in a statement. Several thousand borrowers with older loans will also receive forgiveness through income-driven repayment (IDR).
Lower-income borrowers’ monthly payments are capped by these programs, and the remaining balance is forgiven after a predetermined period of time.
Student loan debt is viewed as a drag on the economy, and the extensive availability of loans has contributed to the rising cost of college.
According to the Education Data Initiative, 43.4 million borrowers owe the Federal Loan Portfolio $1.6 trillion in outstanding student loans, an average of over $37,000 per borrower.
More than $17 billion in debt for 725,000 students was cancelled by the Biden administration in its first year in office, and the Education Department reported that this gave at least temporary relief for 41 million borrowers.
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