Biden administration forgives $39 billion in student loan debt to more than 800,000 borrowers
US Department of Education says more than 800,000 borrowers will be affected
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The U.S. Department of Education announced Friday it "will begin notifying more than 804,000 borrowers that they have a total of $39 billion in Federal student loans that will be automatically discharged in the coming weeks."
"For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness," U.S. Secretary of Education Miguel Cardona said in a statement. "Today, the Biden-Harris Administration is taking another historic step to right these wrongs and announcing $39 billion in debt relief for another 804,000 borrowers."
"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," Cardona added. "This Administration will not stop fighting to level the playing field in higher education."
The Department of Education said the "forthcoming discharges are a result of fixes implemented by the Biden-Harris Administration to ensure all borrowers have an accurate count of the number of monthly payments that qualify toward forgiveness under income-driven repayment (IDR) plans."
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Education Secretary Miguel Cardona says the Biden administration "will not stop fighting to level the playing field in higher education." (Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)
"These fixes are part of the Department’s commitment to address historical failures in the administration of the Federal student loan program in which qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness were not accounted for," it continued. "Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months."
"The Department will continue to identify and notify borrowers who reach the applicable forgiveness thresholds (240 or 300 qualifying monthly payments, depending on their repayment plan and type of loan) every two months until next year when all borrowers who are not yet eligible for forgiveness will have their payment counts updated," it also said.
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A visitor with a sign regarding student loan payments is seen outside the Supreme Court in Washington, D.C., on June 27, 2023. (Al Drago/Bloomberg via Getty Images / Getty Images)
Vice President Kamala Harris said she and President Biden "are committed to delivering relief to student loan debt borrowers to help them move forward with their lives — whether they want to start a family, buy a home, or become an entrepreneur."
"We will not stop there," she added. "Last month, President Biden announced we are pursuing an alternative path to provide relief through the Higher Education Act, and we finalized our new income-driven repayment plan — which will cut monthly payments in half for undergraduate loans. 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."
The announcement comes two weeks after the Supreme Court ruled that the Biden administration cannot go forward with its student loan debt handout program.
In a 6-3 decision, the court held that federal law does not allow the secretary of education to cancel more than $430 billion in student loan debt.
"The Secretary’s plan canceled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600," Chief Justice John Roberts wrote for the majority.
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After the Supreme Court's ruling that his administration couldn't go forward with its student loan debt handout program, President Biden said he would "find other ways to deliver relief." (Celal Gunes/Anadolu Agency via Getty Images / Getty Images)
"I will stop at nothing to find other ways to deliver relief to hard-working middle-class families," Biden said in a statement after that decision was made.
Biden's student loan initiative, which had been on hold pending litigation, involved the federal government providing up to $10,000 in debt relief — and up to $20,000 for Pell Grant recipients — for people who make less than $125,000 a year. The program was expected to cost the government more than $400 billion.
FOX Business' Anders Hagstrom, Chris Pandolfo, Bill Mears and Shannon Bream contributed to this report.