Student Loans Of 40,000 Borrowers To Be Cancelled Immediately
As of Tuesday, April 19, 2022, the student loans of some 40,000 borrowers will be canceled immediately. U.S. Secretary of Education Miguel Cardona said,
"Student loans were never meant to be a life sentence, but it's certainly felt that way for borrowers locked out of debt relief they're eligible for." He went on to say, "Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plans. These actions once again demonstrate the Biden-Harris administration's commitment to delivering meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively."
Cardona announced that thousands of borrowers will receive forgiveness through Income-Driven Repayment (IDR) for older loans. Plus, Federal Student Aid, the largest financial aid for college and universities in the U.S., said another 3.6 million student loan borrowers will get a minimum of three years of additional credit toward forgiveness under the IDR program.
In a statement from Tuesday's big announcement, the Department of Education said,
"First Student Aid will conduct a one-time account adjustment that will count forbearances of more than 12 months consecutive and more than 36 months cumulative toward forgiveness under IDR and Public Service Loan Forgiveness Program."
According to the Department of Education, they are giving borrowers an affordable and effective path to get out of debt. This program is focused on student borrowers with low incomes and high debt loads, who were also impacted by the COVID-19 pandemic. An extension of the student loan repayment was paused in early April through Aug. 31, which will delay interest and collections during the summer months.