Biden forgives US$39 billion in US student debt using programme tweak

US President Joe Biden’s administration will cancel US$39 billion in student debt for more than 804,000 borrowers, the Education Department said on Friday (Jul 14), describing the relief as the result of a “fix” to income-driven repayment (IDR) plans.

Borrowers will be eligible for forgiveness if they have made either 20 or 25 years of monthly IDR payments, the department said. The IDR programme caps payment requirements for lower-income borrowers and forgives their remaining balance after a set number of years.

The department said the relief addresses what it described as “historical inaccuracies” in the count of payments that qualify towards forgiveness under IDR plans.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Secretary of Education Miguel Cardona said.

Biden has said he will pursue new measures to provide student loan relief to Americans after the Supreme Court blocked his plan to cancel hundreds of billions of US dollars in debt.

The Education Department has launched a regulatory “rulemaking” process to pursue his US$430 billion loan relief plan. That process is expected to take months.

Friday’s relatively smaller relief falls under a separate, payment count adjustment programme that the Biden administration announced in April last year, the department said.

In a statement, Vice President Kamala Harris said the 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.” REUTERS