The Education Department Forgives Nearly $3 Billion in Student Loans Under Temporary Biden Program

Nearly $3 Billion In Student Loan Forgiveness

The Education Department is currently notifying borrowers that they qualify for student loan forgiveness under a temporary Biden administration program. Education Secretary Miguel Cardona stated that President Biden's relentless efforts have enabled millions of eligible borrowers to access the student debt relief they qualify for. The program, known as the IDR Account Adjustment, allows the department to count previous loan periods towards a borrower's student loan forgiveness term under income-driven repayment plans.

The Education Department is implementing the account adjustment in phases, with the focus currently on borrowers who have reached the thresholds for loan forgiveness as per the 20- and 25-year IDR repayment terms. The latest round includes approximately 51,000 borrowers, with an estimated $2.8 billion in federal student loans being forgiven.

Over 850,000 borrowers have already been approved for IDR student loan forgiveness under the Biden administration's adjustment program, with over $40 billion in discharges pending or completed. Borrowers working for qualifying nonprofit and public organizations can also receive credit toward student loan forgiveness under the Public Service Loan Forgiveness program through the same account adjustment.

Borrowers with Direct federal student loans can automatically receive the IDR Account Adjustment benefits, while those with commercially-held FFEL loans and other federal loans not owned by the Education Department must consolidate their loans via the federal Direct consolidation loan program. The deadline for consolidation is December 31, 2023, but advocates are pushing for an extension. Borrowers seeking PSLF credit must certify their public service employment by completing a PSLF employment certification by the same deadline.

The Education Department will publish IDR payment counts in 2024, allowing borrowers to monitor their progress towards loan forgiveness. However, a conservative-leaning organization has filed a legal challenge to block the account adjustment, with the case now in the Sixth Circuit Court of Appeals.