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Biden administration unveils $39B in student debt relief

July 17, 2023 | By Kali Girl

The Biden administration announced that it will wipe away a $39 billion in student debt for 804,000 borrowers, reports CNN. The upcoming weeks will witness the implementation of fixes to ensure more accurate counting of qualified monthly payments under existing income-driven repayment plans.

“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 in a written statement.

These plans, designed for federal student loan borrowers, base payments on income and family size, regardless of the total outstanding debt. Once borrowers reach the forgiveness threshold of 20 or 25 years, any remaining balance will be completely eliminated.

“By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans,” Cardona added in the statement.

As student loan repayments are set to resume in October after the pandemic pause, the recent action fulfills President Joe Biden’s promise of debt relief.

Under Biden’s tenure, his administration has already canceled more debt than any other president, providing $116.6 billion in relief for over 3.4 million Americans, according to the Department of Education.”

Multiple GOP-led states and conservative organizations have launched legal battles against the president’s student loan forgiveness initiative. 

Furthermore, Republican lawmakers have strongly voiced their disapproval of Biden’s alterations to the student loan system.

“Some are even objecting to the actions we announced today, which follows through on relief borrowers were promised, but never given, even when they had been making payments for decades … the disregard for working and middle-class families is outrageous,” Biden said.

“I’m never going to stop fighting for you. We’ll use every tool at our disposal to get you the student debt relief you need and reach your dreams. It’s good for the economy. It’s good for the country,” Biden said at the White House last month.

Biden’s SAVE (Saving on a Valuable Education), plan aims to slash monthly bills in half and offer debt forgiveness after 10 years of payments.

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