The U.S. Education Secretary announced Friday that the Biden administration will erase $39 billion in federal student loans for over 804,000 debtors.
The release follows the Supreme Court’s rejection of a White House plan to reduce some debtors’ tens of thousands of dollars in student debt 2 weeks prior. By addressing problems with specific repayment programs that eliminate debt after around 20 or 25 years of payouts, this one-time forgiveness varies from the program the Court rejected.
Some debtors with repayment schedules depending on their earnings will receive relief from the administration via “fixes” to the calculation of monthly installments. The remedy attempts to guarantee that debts for persons who have complied with Education Department rules by making 240 or 300 monthly installments will be erased.
According to a statement from the Education Department, a few payments that “might have brought debtors one step closer to forgiveness weren’t accounted for.”