Joe Biden

The student loan system’s income-driven repayment plans have undergone significant changes, resulting in relief for borrowers. The government now offers debt cancellation after borrowers have made payments for either 20 or 25 years, depending on factors such as loan borrowing time and plan type. This move aims to address the shortcomings of the previous system, which did not accurately track borrowers’ progress towards forgiveness.

US Secretary of Education Miguel Cardona expressed his concern, stating, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.” The Biden administration acknowledges that previous payments, which should have brought borrowers closer to being debt-free, were not properly accounted for.

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To rectify this, the administration has implemented a new approach to ensure borrowers’ progress towards forgiveness is accurately recorded. Payments made during certain deferments and forbearances, as well as partial or late payments, will now be considered when determining eligibility for debt cancellation.

This announcement comes shortly after the Supreme Court invalidated President Joe Biden’s comprehensive student loan forgiveness plan. However, the government remains committed to providing relief to borrowers and will notify eligible individuals of the new repayment plan through the Education Department in the upcoming days.

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