The U.S. Department of Education announced Tuesday that at least 40,000 federal student loans will be immediately canceled under the Public Service Loan Forgiveness Program. Photo by Shaun Wilkinson/Shutterstock
At least 40,000 borrowers will have their student loans immediately canceled under the Public Service Loan Forgiveness Program, the Department of Education said Tuesday.
Thousands of borrowers with older loans will also receive forgiveness through income-driven repayment, and more than 3.6 million borrowers will receive additional credit for at least three years of income-driven forgiveness, according to the Federal Student Aid Agency, the largest U.S. financial aid agency for students at colleges and universities.
“Student loans have never been a life sentence, but it certainly feels that way for borrowers who are locked out of the debt relief they are eligible for,” said U.S. Secretary of Education Miguel Cardona.
“Today, the Department of Education will begin to remedy years of administrative failures that have effectively denied loan forgiveness commitments to certain borrowers enrolled in the IDR program. These actions demonstrate once again the Biden-Harris Administration’s commitment to providing meaningful debt relief and ensuring that the federal student loan program is administered fairly and efficiently.”
The department said the move will help address the impact of the COVID-19 pandemic on borrowers with lower incomes and higher debt burdens by giving borrowers an affordable and effective pathway out of debt.
“First Student Aid will make a one-time account adjustment to count forbearance periods of more than 12 consecutive months and more than 36 cumulative months as forgiveness under the IDR and Public Service Loan Forgiveness programs,” the department said in a statement.
Earlier in April, the Department of Education announced it was extending the student loan repayment moratorium until Aug. 31, delaying any interest and collections until the summer as well.
Administrative failures over the years have effectively stripped certain borrowers enrolled in the IDR program of the promise of loan forgiveness. Today, we are making up for these lapses by changing our income-driven repayment and public service loan forgiveness programs. Learn more here: https://t.co/SF5W7zaYo8- Secretary Miguel Cardona (@SecCardona) April 19, 2022