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Wednesday, April 17, 2024

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US President Joe Biden Erases Student Debt Amounting To $39 Billion

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US President Joe Biden’s administration will exempt $39 billion in student debt for more than 804,000 borrowers, said the Education Department on Friday, saying that the relief as the result of a “fix” to income-driven repayment (IDR) plans.

However, there lies a condition for such exemption. Only if the borrowers have made monthly IDR payments for 20 to 25 years, their debt will be forgiven. Lower-income borrowers’ monthly payments are capped under the IDR programme, and after a certain period of time, the remaining sum is forgiven.

In an official statement, Biden said, “These borrowers will join the millions of people that my administration has provided relief to over the past two years – resulting in over $116 billion in loan relief to over 3 million borrowers under my administration.”

The Education Department also expressed that this exemption addresses, according to it, the “historical inaccuracies” in the count of payments that are eligible for forgiveness under IDR plans.   Education Secretary Miguel Cardona said, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.”

After the Supreme Court rejected his proposal to stop hundreds of billions of dollars in debt, Biden stated he would pursue new approaches to relieve Americans of their student loan debt. For this purpose, the Education Department has rolled out a “rulemaking” process to move forward with his $430 billion loan relief plan. However, the process would likely take months.

The relief announced on Friday is comparatively smaller and comes under a distinct payment count adjustment program that Biden had made public in April 2022, the department said.

Vice President Kamala Harris said the government “will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt.”

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