$39 Billion in Student Loan Relief for 804,000 People.

Inside Higher Ed

Katherine Knott

July 17, 2023

More than 804,000 borrowers will have their student loans forgiven in the next month following moves by the Biden administration to count more payments toward forgiveness.

The administration said in April 2022 that it would adjust accounts to give borrowers credit for payments and time spent in repayment. The adjustment is part of an effort to address failures in administering the income-driven repayment system “in which qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness were not accounted for,” the department said in a news release.

This first group of borrowers who will see relief hold $39 billion in student loans and include those who have made enough payments over 20 to 25 years to see the rest of their balances wiped out. The department will continue to track borrowers who reach the forgiveness thresholds every two months until next year.

At that point, “all borrowers who are not yet eligible for forgiveness will have their payment counts updated,” the department said. The Biden administration is working on future fixes to the income-driven repayment program that will offer more generous terms for borrowers and more pathways to forgiveness. The first of those fixes will take effect at the end of the month.

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