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# Biden-Harris Administration to Provide 804,000 Borrowers with $39 Billion in Automatic Loan Forgiveness as a Result of Fixes to Income Driven Repayment Plans 

# Biden-Harris Administration to Provide 804,000 Borrowers with $39 Billion in Automatic Loan Forgiveness as a Result of Fixes to Income Driven Repayment Plans 

July 14, 2023

**Contact:  **press@ed.gov

                                    -        
The Department of Education (Department) today  will  begin notifying  more than  804,000 borrowers that they have a total of $39 billion in  Federal student loans  that will be automatically discharged in the coming weeks. In total, the Biden-Harris  Administration has approved more than $116.6 billion in student loan  forgiveness for more than 3.4 million borrowers.

	  The forthcoming  discharges are a result of fixes implemented by the Biden-Harris Administration  to ensure all borrowers have an accurate count of the number of monthly  payments that qualify toward forgiveness under income-driven repayment (IDR)  plans. These fixes are part of the Department’s commitment to address  historical failures in the administration of the Federal student loan program  in which qualifying payments made under IDR plans that should have moved  borrowers closer to forgiveness were not accounted for. Borrowers are eligible  for forgiveness if they have accumulated the equivalent of either 20 or 25  years of qualifying months.

  “For far too long,  borrowers fell through the cracks of a broken system that failed to keep  accurate track of their progress towards forgiveness,” said U.S. Secretary of  Education Miguel Cardona. “Today, the Biden-Harris Administration is taking  another historic step to right these wrongs and announcing $39 billion in debt  relief for another 804,000 borrowers. By fixing past administrative failures,  we are ensuring everyone gets the forgiveness they deserve, just as we have  done for public servants, students who were cheated by their colleges, and  borrowers with permanent disabilities, including veterans. This Administration  will not stop fighting to level the playing field in higher education.”

	  Today’s  action is part of the Biden-Harris Administration’s implementation of the payment count adjustment announced in April 2022. That action addressed historical  inaccuracies in the count of payments that qualify toward forgiveness under IDR  plans. Under the Higher Education Act and the Department’s regulations, a  borrower is eligible for forgiveness after making 240 or 300 monthly payments—the  equivalent of 20 or 25 years on an IDR plan or the standard repayment plan,  with the number of required payments varying based upon when a borrower first  took out the loans, the type of loans they borrowed, and the IDR payment plan  in which the borrower is enrolled. Inaccurate payment counts have resulted in  borrowers losing hard-earned progress toward loan forgiveness. This action also  addresses concerns about practices by loan servicers that put borrowers into  forbearance in violation of Department rules. The Department previously  began discharging loans for borrowers who reached forgiveness for Public  Service Loan Forgiveness (PSLF) through these changes.  

  “At the start of this  Administration, millions of borrowers had earned loan forgiveness but never  received it. That’s unacceptable,” said Under Secretary James Kvaal.  "Today we are holding up the bargain we offered borrowers who have  completed decades of repayment.”  

	  Borrowers receiving  notifications in the coming days include those with Direct Loans or Federal  Family Education Loans held by the Department (including Parent PLUS loans of  either type) who have reached the necessary forgiveness threshold as a result  of receiving credit toward IDR forgiveness for any of the following periods:
- Any       month in which a borrower was in a repayment status, regardless of whether       payments were partial or late, the type of loan, or the repayment plan; 
- Any       period in which a borrower spent 12 or more consecutive months in       forbearance; 
- Any       month in forbearance for borrowers who spent 36 or more cumulative months       in forbearance;  
- Any       month spent in deferment (except for in-school deferment) prior to 2013;       and 
- Any       month spent in economic hardship or military deferments on or after       January 1, 2013. 

In addition, months  described above that occurred prior to a loan consolidation will also be  counted toward forgiveness.

      The Department will  continue to identify and notify borrowers who reach the applicable forgiveness  thresholds (240 or 300 qualifying monthly payments, depending on their  repayment plan and type of loan) every two months until next year when all  borrowers who are not yet eligible for forgiveness will have their payment  counts updated. Any month counted for this purpose can also be counted toward  PSLF if the borrower documents qualifying employment for that same period.

      Eligible borrowers will  be informed by the Department starting today that they qualify for forgiveness  without further action on their part. Discharges will begin 30 days after  emails are sent. Borrowers who wish to opt out of the discharge for any reason  should contact their loan servicer during this period. Borrowers will be  notified by their servicer after their debt is discharged. Those receiving  forgiveness will have repayment on their loans paused until their discharge is  processed, while those who opt out of the discharge will return to repayment  once payments resume.

      Today’s action builds on  the Biden-Harris Administration’s unparalleled record of student debt relief to  date, including:
- $45       billion for 653,800 public servants through improvements to PSLF; 
- $10.5       billion for 491,000 borrowers who have a total and permanent disability;       and 
- $22       billion for nearly 1.3 million borrowers who were cheated by their       schools, saw their schools precipitously close, or are covered by related       court settlements. 

President Biden and the  Department have also taken steps to help borrowers access affordable payments  going forward. The Department recently issued final regulations creating the  most affordable payment plan ever—the Saving on a Valuable Education (SAVE)  plan. The SAVE plan will cut  payments on undergraduate loans in half compared to other IDR plans, ensure  that borrowers never see their balance grow as long as they keep up with their  required payments, and protect more of a borrower’s income for basic needs. A  single borrower who makes less than $15 an hour will not have to make any  payments. Borrowers earning above that amount will save more than $1,000 a year  on their payments compared to other IDR plans. Benefits from the SAVE plan will  start becoming available this summer. 
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