On Tuesday the Biden Administration formally announced a string of new plans to extend student loan forgiveness and improve other areas of borrower forgiveness. The new moves will also result in the immediate dismissal of student loans for more than 40k people who participated in some form of public service.
“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” said U.S. Secretary of Education Miguel Cardona. “Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR (income-driven repayment) plans. These actions once again demonstrate the Biden-Harris administration’s commitment to delivering meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively.”
The new moves also target what is known as forbearance steering which includes when a servicer seers someone towards such instead of the readily available income driven repayment plans.
Any forbearances of more than 12 consecutive months or 36 cumulative months will be counted toward a borrower’s eligibility for any loan forgiveness. Any payments made under other repayment plans will count towards forgiveness in the income-driven program.
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