The White House on Friday announced plans to approve $39 billion of federal student loans to be discharged for over 804,000 borrowers in the upcoming weeks.
For eligibility, borrowers would have to had paid their loans for 20-25 years, or 240 to 300 months on an income-driven repayment (IDR) plan. They’d also had to have either direct loans or Federal Family Education Loans. Loans that parents take out, parent PLUS loans, are also included.
The administration will allow people who paid partially or late during a payment period to be considered. Borrowers who also spent a consecutive year or more in forbearance, when loans payments are temporally halted, also qualify.
Borrowers will be emailed that they’ve been selected for being discharged and effects will hit 30 days after. Those not eligible will have their loan count updated.
“I have long said that college should be a ticket to the middle class — not a burden that weighs down on families for decades,” President Joe Biden said in a statement Friday afternoon.
The decision comes two weeks after the U.S. Supreme Court struck down the administration’s student loan forgiveness plan that would have eliminated up to $10,000 for borrowers with an annual income of less than $125,000. Pell Grant recipients would have been granted up to $20,000 in relief.
Federal officials recently announced the Saving on a Valuable Education (SAVE), which would cut loans in half for many undergraduate students and make other changes, such as forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less.
Before the discharge plan, many borrowers struggled to make progress in paying off their loans because of inaccurate payment counts setting them back, federal officials said.
Georgia has the third-highest rate for student loan debt nationwide, with an average of almost $42,000 per borrower, federal statistics show. Tuition has increased 13.4% nationally over the last 10 years according to numbers from the National Center of Education Statistics.
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