« We won’t stop there, » Vice President Kamala Harris said in a statement, praising the announcement as a « historic step » to alleviate student debt.
« Our administration will continue to fight to ensure Americans can access a high-quality postsecondary education without shouldering the burden of unmanageable student loan debt, » he said.
What happened: Department officials reviewed borrower accounts to retroactively count months for forgiveness under income-based repayment plans that were not previously counted or typically did not qualify.
Those months of credit prompted the more than 804,000 borrowers to reach the 20- or 25-year loan forgiveness threshold, depending on the type of income-based repayment plan.
Department officials said borrowers who receive loan forgiveness will begin receiving notices in the « next few days » and that the discharges will begin 30 days later.
What’s next: The Department of Education said it will continue to identify new groups of borrowers who meet those thresholds every two months. The agency said it would « next year » award all remaining retroactive credit to any borrowers who are pushed closer to loan forgiveness but still fall short of the 20- or 25-year mark.
The department previously said some 3.6 million borrowers will receive at least three years of loan forgiveness credit under the new one-time adjustment.
Key context: Income-based repayment programs promise borrowers the opportunity to completely clear their debts after making payments for 20 or 25 years, depending on the plan. But relatively few borrowers have received forgiveness under such plans.
In some cases, the Department of Education did not properly track borrowers’ monthly credit to make payments. In addition, state attorneys general and the Consumer Financial Protection Office also filed lawsuits accusing student loan servicers of improperly directing borrowers to long-term lenders who don’t qualify for loan forgiveness. loan.
For example, Navient, which was once one of the largest servicers in the department, reached a $2 billion settlement with a bipartisan group of 40 attorneys general last year to settle charges which included tolerance driving. The company denied any wrongdoing.
“At the start of this administration, millions of borrowers earned loan forgiveness but never received it. This is unacceptable, » Education Undersecretary James Kvaal said in a statement. « Today we are maintaining the deal we have offered to borrowers who have completed decades of repayment. »
GOP pushback: Representative. Virginia Fox (RN.C.), chair of the House Education Committee, criticized the Education Department’s announcement as illegal and too costly for taxpayers.
« The Biden administration’s blatantly political attempt to bypass the Supreme Court is shameful, » he said in a statement. « The Biden administration is trampling on the rule of law, hurting borrowers and abusing taxpayers to go after securities. »