Student loan debt forgiveness arrives for some borrowers as payments resume for others

Student loan debt forgiveness arrives for some borrowers as payments resume for others Because of bureaucratic mix-ups or other obstacles, the White House said, this group of student loan borrowers never got the relief they were entitled to all along.

Another 125,000 student loan borrowers will have $9 billion in student loan debt erased, the Biden administration said Wednesday. 

Those borrowers were already eligible for cancellation through various programs: Public Service Loan Forgiveness for people working as teachers and health care workers, for instance; income-driven repayment plans that link payments to wages and forgive balances after 20 or 25 years of payments; or discharges for those with disabilities.

They got the 'golden emails:'Student loan debt forgiveness becomes a reality for more than 804,000 who paid for decades

Who are the latest to have their student loans canceled?

The White House said the $9 billion in debt forgiveness breaks down like this:

• $5.2 billion for 53,000 borrowers who worked for at least a decade in eligible public service fields such as teaching or the military;
• Nearly $2.8 billion for nearly 51,000 borrowers through adjustments to income-driven repayment plans. These people had been in repayment for two decades or more and finally reached the threshold of payments for forgiveness.
• $1.2 billion for nearly 22,000 borrowers who have permanent disabilities and were identified through a Social Security data match. 

• The administration’s actions Wednesday – which Education Secretary Miguel Cardona described as “efforts to fix the broken student loan system” – come as student loan payments return for millions of borrowers after a more than three-year hiatus during the pandemic. 

  The timing: Some of these borrowers have just now, coincidentally, met all the criteria to have their loans forgiven. But others, because of bureaucratic mix-ups or other obstacles, never got the relief they were entitled to until now. 

• The forgiveness comes after a number of similar announcements since June, when the Supreme Court struck down President Joe Biden’s original plan of providing up to $20,000 in loan forgiveness for most borrowers. Although the president was thwarted in his attempt at far-reaching relief, his administration has managed to chisel away at student loan debt on a smaller scale. 

• Among the 125,000 borrowers whom the White House said Wednesday will have their debt erased are another group in the same situation: They signed up for income-driven repayment plans, paid on their loans for more than 20 years and are ready to have their balances erased.

  Other groups who have been promised loan forgiveness include borrowers who were misled or defrauded by their colleges or attended schools that abruptly closed.