'Congratulations!' 800k borrowers got emails from Biden, forgiving their student debt
The administration last week emailed 813,000 borrowers, who weren’t credited for payment that would have made them eligible for student loan forgiveness under IDR plans, telling them their balances had been reduced to zero.
Christmas came early this year for hundreds of thousands of Americans with student loan debt. The Biden administration last week emailed more than 800,000 borrowers to tell them that their balances had been reduced to zero.
This relief for borrowers came on the heels of many not getting proper credit toward payments made on income-driven repayment plans intended to allow borrowers to make payments based on their income, with the promise of forgiveness after 20 or 25 years, a White House official said. Over the past few months, a growing number of borrowers have been receiving debt relief through the Education Department’s adjustments to borrowers’ accounts. In October, 125,000 more borrowers got $9 billion in debt wiped out not only through income-driven repayment adjustments but also through Public Service Loan Forgiveness.
This relief comes at a challenging time for borrowers. After a pause of more than three years, payments resumed in October. Many borrowers have encountered multiple challenges since payments resumed, such as inaccurate billing and communication issues with their lenders, because of an unprecedented transition back into repayment. The Education Department has vowed to hold servicers accountable as borrowers make their payments,
In June, the U.S. Supreme Court rejected President Biden’s student loan forgiveness program, which would have cancelled much as $20,000 in student loan debt for individual borrowers. The price tag for the program totaled out to be $430 billion. So far, the administration has forgiven $127 billion (about $390 per borrower) in student loan debt for 3.6 million borrowers.
“The president is committed to fighting for hardworking American families, making sure we get them a little more breathing room and allowing them to support themselves and their families,” a White House official said.
Related: Skills over degrees? What employers can do to tackle the student debt crisis
Meanwhile, as borrowers nationwide revise their financial strategies to accommodate resumed loan payments, the focus shifts to how employers can play a role in alleviating this burden. By matching 401(k) contributions for student loan payments, employers can significantly enhance their employees’ financial well-being without overextending their resources. This approach aligns with the broader goal of building a financially resilient workforce.