More than 804,000 federal student loan borrowers are in for a sweet surprise. After the Supreme Court struck down President Biden's bid for widespread debt forgiveness, borrowers are reportedly receiving emails from the U.S. Department of Education, telling them that their debt will be erased in time and - not far. The reduction is the result of a promise made by the Biden administration last year in response to an annual complaint, lawsuit, and NPR investigation that found that many long-term borrowers should qualify for loan forgiveness under the federal law with repayment plans and - cause (IDR). was not received due to mismanagement by the department and loan officers. The move would wipe out $39 billion in federal student loan debt. Lenders, lawyers, and journalists have been warning for years about these IDR failures. Although the IDR law has promised that a borrower's loan balance will be forgiven after 20 years, a March 2021 report from Borrower Advocates found that during that time, 4.4 million borrowers defaulted on their loans. at least 20 years - but only 32 Already waived debt under IDR. For what? Big problem:
These IDR plans, designed as a safety net for the bankrupt, are hard to sign up for. Therefore, lending companies often put borrowers in financial difficulties and endurance for a long time, the process of which the employees and the call center can easily be done on the phone. Patience may provide a temporary respite, but interest continues to increase. In April 2022, an NPR investigation, based on an unpublished Department of Education document, revealed even more problems with the department's implementation of these IDR plans, including that many loan agencies are not complying. which) and that the history of payment is damaged and insufficient when borrowers are transferred from one service provider to another, which is common. An in-depth review of borrowers' accounts has been completed and will continue until 2024. Friday's $39 billion adds a big boost to the Biden administration's initial debt relief efforts, now totaling at least $116 billion, and shows how the Department of Education can provide targeted aid to borrowers and -no problem even with the recent Supreme Court decision. scolding.
"For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness," said U.S. Secretary of Education Miguel Cardona in a Friday press release announcing the forgiveness. In response, the Biden administration pledged last spring to conduct a one-time "account adjustment" for federal student loan borrowers, giving them retroactive credit towards loan forgiveness for months spent in long-term forbearance. Even borrowers who were never in an IDR plan are now receiving or soon will receive retroactive credit toward forgiveness, "regardless of whether payments were partial or late, the type of loan, or the repayment plan," according to the department's release.
