The Department of Education announced Friday that it will automatically forgive $39 billion worth of student debt for some 800,000 borrowers.
The new policy means borrowers’ debt could be eliminated if they have been making student loan payments for 20 years or 25 years, depending on when they borrowed along with their loan and plan type.
The Biden Administration says it’s addressing fixes to the student loan system’s s income-driven repayment plans.
The action follows a Supreme Court decision in June that struck down Biden’s initial student loan forgiveness plan.
The Justices ruled 6-3 along ideological lines that the Education Secretary Miguel Cardona doesn’t have sweeping authority to forgive student debt under the HEROES Act which the Administration had argued allowed the Education Secretary to grant relief in times of national emergency—such as the Covid-19 pandemic. The Administration’s assertion had been quickly met by legal challenges.
In response to the Supreme Court’s ruling Biden announced new actions to protect student loan borrowers, including allowing Secretary Cardona to waive or release loans under certain circumstances.
The Department of Education says it will begin notifying people who qualify for the new debt forgiveness policy in the coming days.
