US Education Department Announces Automatic Loan Relief for Over 800,000 Borrowers

The US Department of Education has announced it will provide automatic debt relief for more than 800,000 student loan borrowers.

In a press release on July 18, the Department stated that the relief will be provided under the fixes to Income-Driven Repayment (IDR) plans implemented by the Biden-Harris Administration, Erudera.com reports.

Last week, 804,000 borrowers who collectively hold a total of $39 billion in federal student loans began receiving notifications about their eligibility for debt relief which will be automatically discharged in the following weeks.

“Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months depending on their loan type and IDR plan,” the press release reads.

According to the released data, the majority of student loan borrowers approved for relief are in Texas, a total of 63,730, followed by 61,890 in California and 56,930 in Florida.

The following list shows the amount of debt that will be automatically discharged, from the highest to lowest for each state and territory, along with the number of borrowers eligible for the relief:

The Department states in the press release that by removing this debt, it aims to ensure that all borrowers have an accurate count of the number of monthly payments that qualify for loan forgiveness.

It adds the purpose of the relief also reflects efforts to tackle historical failures in managing federal student loans, including payments made under IDR plans which should have facilitated loan forgiveness.

“Starting today, over 800,000 student loan borrowers who have been repaying their loans for 20 years or more will see $39 billion of their loans discharged because of steps my Administration took to fix failures of the past,” the US President Joe Biden said in a statement announcing the debt relief.

To date, the Department has approved the cancelation of over $116 billion in student loans, relieving more than 3.4 million borrowers across the country of the obligation to repay debt, and Biden said his administration will not stop there.

According to him, despite efforts from Republican lawmakers to end his student loan forgiveness plan and Supreme Court’s wrong decision, he will continue keeping the promise of college to all Americans for as long as he serves as the US President.

Under President Biden’s plan, more than 40 million borrowers could have seen $10,000 to $20,000 in student loan debt erased. But, last month, the Supreme Court blocked Biden’s student debt forgiveness plan in a 6-3 decision following several lawsuits seeking to end the plan.