After the Supreme Court voted down President Joe Biden’s student loan forgiveness program in June, the president promised to continue fighting to provide relief to millions of Americans paying off debts that often reach into the hundreds of thousands of dollars.
The court ruled 6-3 against the president’s plan to cancel as much as $400 billion in student loans, arguing that the president overstepped his authority.
On Friday, July 14, President Joe Biden announced that he would take new action to automatically forgive $39 billion in student loan debt for 804,000 Americans.
The plan could be the first of other actions the Biden administration intends to take ahead of the 2024 election to assure Americans that he intends to follow through on his original plan. Biden’s newest plan is fundamentally different from his original plan and seeks to remedy failures in a system designed to cancel remaining debt after regular payments are made for 20 or 25 years.
Here’s How It Works
According to the Biden administration, payments that should have moved a student loan borrower closer to the 20 or 25-year cutoff point, depending on loan type, were often not accounted for. Failures in the system theoretically mean that some Americans who have made payments toward their loan debt would not have their debt canceled when expected.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said on Friday.
Under the latest plan, any borrowers who made late or deferred payment, or who paused their repayments, will not face any penalties for doing so.
“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,” a statement from the Department of Education reads.
The statement added that the change is part of an effort to “address historical failures” in the administration of the Federal student loan program.
Are You Eligible?
In a statement from the Department of Education, it was promised that over 804,000 borrowers will be notified by the government “in the coming weeks” if they are eligible to receive relief.
Among those who will receive notifications over the coming weeks are those who received Federal Family Education Loans or Direct Loans who have reached the forgiveness threshold regardless of whether payments were late or partial.
Jack Buckby is 19FortyFive’s Breaking News Editor. He is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.