Biden Administration announces debt relief for 40,000 student loan borrowers
The Biden Administration announced this week that it is taking action to provide debt relief for some 40,000 student loan borrowers who qualify for income driven repayment programs.
The announcement noted the following changes for federal student loan borrowers:
- Forbearance Steering:
- Conducting a one-time account adjustment to count certain long-term forbearances toward IDR and PSLF forgiveness
- Increasing oversight of servicers’ forbearance use
- IDR Fixes:
- Conduct a one-time revision of IDR payments to address past inaccuracies
- Permanently fix IDR payment counting by reforming FSA's IDR tracking
These two changes are expected to immediately impact 40,000 borrowers.
Upon learning of the announcement, Senate leaders who have been working on student loan issues issued a statement applauding the move. The Senators involved include Sen. Sherrod Brown of Ohio, Sen. Elizabeth Warren of Massachusetts, and Sen. Dick Durbin of Illinois.
“This is an important step to ensure the effectiveness of our student loan cancellation programs and to enable low-income borrowers to eliminate their debt so they can buy a home, start a business, and fully participate in the economy,” said the lawmakers. “We will keep working to ensure these programs are not overly complex and fulfill their promise of forgiveness and make it easier for all Americans to afford a quality education.”
These same Senators previously sent letters to the Consumer Financial Protection Bureau (CFPB) and Education Department encouraging action to fix the persistent problems in federal student loan repayment programs.
Additionally, Senators Brown, Warren, and Durbin have consistently urged President Biden to take steps to cancel student debt.