The Biden administration plans to forgive $9 billion in student loan debt for about 125,000 Americans “through fixes to income-driven repayment (IDR) and Public Service Loan Forgiveness, and by canceling debt for borrowers with total and permanent disabilities,” the White House announced on October 4.
The $9 billion in forgiven loans consist of $5.2 billion in debt relief for 53,000 borrowers under the Public Service Loan Forgiveness program, nearly $2.8 billion in new debt relief for about 51,000 borrowers through fixes to income-driven repayment, and $1.2 billion in relief for about 22,000 borrowers who have a total or permanent disability.
The announcement came just days after the October 1 resumption of student loan repayments after a three-year hiatus.
The borrowers who qualified for relief from fixes to IDRs had made 20 years or more of payments, “but never got the relief they were entitled to,” the White House said. It added that the borrowers with total or permanent disabilities were identified and approved for discharge through a data match with the Social Security Administration.
The administration has now approved $127 billion in debt cancellations for nearly 3.6 million borrowers to-date, the White House said.
Earlier this year, the Supreme Court struck down President Joe Biden’s signature loan forgiveness plan. The administration had wanted to forgive up to $10,000 of student loan debt for eligible borrowers, and up to $20,000 in student loan debt for eligible Pell Grant recipients.
Since then, however, the administration has forgiven some student debt in several areas. These include the cancelling of $37 million in debt last month for about 1,200 students enrolled at the University of Phoenix, which was found to have a national ad campaign that misled prospective students.
Loan repayments begin
To prepare to start paying your student loans back, you’ll want to start by getting the facts straight by logging into your account at StudentAid.gov to review the list of all your federal loans, as Kiplinger previously reported. Check your loan details, make sure your contact information is correct, and review your financial information to make sure everything is up-to-date.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
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