804,000 federal student loan borrowers are set to have their debts automatically erased, thanks to a promise made by the Biden administration last year.
The forgiveness is for borrowers who have been repaying their loans under the government’s income-driven repayment plans (IDRs). These plans cap monthly payments at a percentage of borrowers’ income, and after 20 or 25 years of payments, any remaining balance is forgiven.
However, many borrowers who should have qualified for loan forgiveness under the IDR rules were denied because of mismanagement by the Education Department and loan servicers. In response to these complaints, the Biden administration promised to automatically forgive the debts of borrowers who had been wrongly denied forgiveness.
The forgiveness will benefit more than 804,000 borrowers and amount to $39 billion in debt relief. It is the largest single-day student loan forgiveness action in history.
The borrowers who are eligible for forgiveness will receive an email from the Education Department notifying them that their debts have been erased. They will not have to take any action to receive the relief.
This is a major step forward in addressing the student loan debt crisis. It is a victory for the borrowers who have been fighting for years to get the relief they deserve.
Borrowers have long been frustrated by the government’s failure to keep accurate track of their progress towards student loan forgiveness.
This has led to many borrowers being denied forgiveness even though they were eligible. In a Friday press release, U.S. Secretary of Education Miguel Cardona announced that the Department of Education would be forgiving $39 billion in student loan debt for borrowers who had been wrongly denied forgiveness.
“For far too long, borrowers fell through the cracks of a broken system,” said Cardona. “This is a major step forward in addressing the student loan debt crisis.”
Borrowers, advocates, and journalists have warned for years about the IDR failures. In 2019, an NPR investigation found that millions of borrowers had been denied forgiveness because of errors by the Education Department and loan servicers.
The forgiveness announced by Cardona is a victory for borrowers who have been fighting for years to get the relief they deserve. It is also a sign that the Biden administration is committed to addressing the student loan debt crisis.
The Borrower Defense Program is a valuable resource for borrowers who believe that they were misled or defrauded by their college or university. If you think you may be eligible for borrower defense, it is important to apply as soon as possible. The process can be complex, and it is helpful to have experienced help.
There are many organizations that can help you apply for borrower defense. Some of these organizations offer free assistance, while others charge a fee. It is important to do your research and choose an organization that is reputable and experienced.
Applying for borrower defense can be a long and challenging process. However, it is worth it if you are eligible for relief. If you are struggling to repay your student loans, borrower defense could be the answer.
Here are some tips for applying for borrower defense:
- Start by gathering all of your documentation. This includes any paperwork related to your college or university, such as your enrollment agreement, transcripts, and financial aid documents.
- Be clear and concise in your application. Explain why you believe you were misled or defrauded by your college or university.
- Be prepared to provide evidence to support your claim. This could include emails, letters, or other documents that show that your college or university made false or misleading statements.
- Be patient. The borrower defense process can take several months or even years.
If you are considering applying for borrower defense, I encourage you to reach out for help. There are many organizations that can assist you with the process. With the right help, you can increase your chances of being approved for relief.
