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Two weeks after the Supreme Court ruled that the Biden administration could not go ahead with its student loan debt delivery program, The Department of Education announced that it will notify more than 804,000 borrowers who have a total of $39 billion in federal student loans that they will be canceled automatically for the next few weeks.
Through a statement, Miguel Cardona, Secretary of Education, mentioned that the adjustment has the objective of correcting failures generated by previous administrative procedures.
“For too much time, borrowers fell through the cracks of a broken system that couldn’t keep accurate track of their progress toward forgiveness.
Today, The Biden-Harris Administration is taking another historic step to right these wrongs, announcing $39 billion in debt relief for another 804,000 borrowers.
By correcting past administrative failures, we make sure everyone gets the forgiveness they deserve, just as we have done with public servantsstudents who were ripped off by their colleges, and borrowers with permanent disabilities, including veterans“, he highlighted.
And it is that, according to the Department of Education, in some cases the qualified payments made by the borrowers were calculated erroneously.
In fact, Today there are several different types of income-based repayment plans for federal student loan borrowers, which payments are based on the borrower’s income and family size, regardless of their total outstanding debt.
However, upon reaching a set forgiveness threshold of 20 or 25 years, the borrower’s remaining balance is wiped out.
“The Department will continue to identify and notify borrowers who meet applicable forgiveness thresholds (240 or 300 qualifying monthly payments, depending on your repayment plan and loan type) every two months until next year when all borrowers who are not yet eligible for forgiveness will have their payment counts updated,” the letter indicates.
Keep reading:
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