The move comes as the Democratic administration pushes forward with a campaign promise to offer student debt relief.
The administration of United States President Joe Biden has announced that it will eliminate an estimated $39bn in student debt, in its latest attempt to fulfill one of the Democrat’s central campaign promises.
Friday’s announcement from the Department of Education is slated to affect nearly 804,000 borrowers enrolled in federal income-driven repayment plans, which adjust the amount owed per month according to salary and family size.
The department, however, has framed Friday’s decision as an effort to correct past wrongs.
Under current regulations, a borrower is eligible for student loan forgiveness after completing 240 to 300 monthly payments — roughly the equivalent of 20 to 25 years. After that time, the rest of the debt is generally absolved.
But “inaccurate payment counts have resulted in borrowers losing hard-earned progress toward loan forgiveness”, the department said.
“At the start of this Administration, millions of borrowers had earned loan forgiveness but never received it. That’s unacceptable,” Under Secretary of Education James Kvaal said in Friday’s press release.
