Administrative Errors Help 40,000 Get Out of Their Student Loans Entirely
This week, NPR released an article about how folks may finally get help getting rid of their student loans. In some cases, people will be forgiven entirely for their loans. At least 40,000 borrowers will have their student debt entirely wiped clean due to major administrative errors within the Department of Education.
This news is coming on the heels of last month’s student loan news. In March, it was revealed by the Biden Administration that people who have been on the Public Service Loan Forgiveness plans were eligible for a waiver that would allow previous student loan payments to count toward their forgiveness plan. Effectively, this would help over 100,000 people potentially wipe their debt clean.
Now, it’s been revealed that another repayment plan is in the news for a whole other reason. Some serious administrative errors are happening because, although Income-Based Repayment plans have been around for 25 years, and according to an article published by the National Consumer Law Center, only 32 people have had their loans forgiven. Yes… 32 people. Over 4.4 million borrowers had been repaying their loans for at least 20-25 years. I’m not great at math but that match doesn’t check out.
Thanks to NPR’s investigative reporting, there is going to be retroactive remedying of years and years of administrative errors which have kept people in student loan debt. According to the largest NPR article, “Tuesday’s announcement comes after years of complaints and lawsuits and, most recently, an NPR investigation that revealed that these IDR plans, which promise affordable monthly payments as low as $0 and loan forgiveness after 20-25 years, have been badly mismanaged by the department and the loan servicing companies it employs.”
U.S. Secretary of Education Miguel Cardona said in a statement, “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. 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 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.”
According to this article, 8.5 million borrowers currently enrolled in income-driven repayment plans and it’s meant to help people feel like borrowers may not be in debt for the rest of their lives. Does this news apply to you? If there are truly over 8 million enrolled in IDR than it may not. For more information, and to read the fine print, visit U.S. Department of Education’s website to read about the changes to their loan forgiveness programs and whether or not you qualify for a credit.