WASHINGTON — The Biden administration announced Friday that more than 800,000 student loan borrowers will have their remaining federal student loans forgiven over the next several weeks.
The U.S. Department of Education said in a statement that $39 billion in federal student loans was expected to be forgiven through the initiative.
The forgiveness plan by Biden's education department comes on the heels of a major Supreme Court loss, when the conservative-majority court struck down the president's plan to offer mass debt forgiveness to tens of millions of Americans.
“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 in a written statement. “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans."
The administration said the debt forgiveness is being offered to correct errors from previous administrations. Under the Higher Education Act and Dept. of Ed. regulations, they argue, a borrower is equivalent for forgiveness after around 240 or 300 payments — the equivalent of 20 to 25 years on a standard repayment plan.
While the number of required payments varies based on when the loans were first taken out and what type they are, Biden administration officials contend that inaccurate payment counts have caused borrowers to lose progress towards their loan forgiveness threshold.
Essentially, what the Biden administration is doing is counting months where payments were partial or late, when loans were paused by forbearance, or when the loans were deferred any time after 2013.
Previously, those time periods and payments (or deferred payments) wouldn't count towards the 240 or 300-month threshold.
In a statement, Vice President Kamala Harris said the administration was committed to delivering relief to student loan borrowers "to help them move forward with their lives."
She said the White House would continue to expand debt forgiveness through other programs.
"We will not stop there," Harris said. "Our Administration will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt."
One of the programs Harris was referring to is the SAVE plan — an acronym for Saving on a Valuable Education — which would enable those with student loan debt to enroll in income-driven repayment plans, potentially lowering monthly bills.
That program is set to begin to roll out this summer, and the Biden administration said it will be fully phased in next year. But analysts say it could be the next major legal battle Biden faces, with Republican-led states likely to challenge it in federal court in a similar fashion to the successful challenge against his original student loan forgiveness plan.