Millions of student loan borrowers will be closer to debt forgiveness after a number of changes the U.S. Department of Education plans to make to the lending system.
The department made the announcement Tuesday, saying it plans to address “historical failures in the administration of the federal student loan programs.”
Those changes include reassessing the payment timelines for borrowers enrolled in income-driven repayment plans and public service loan forgiveness and making sure they’re on track for the eventual debt cancellation these programs lead to.
More from Personal Finance:
1 in 5 workers runs out of money before payday, survey finds
Pooling money makes couples more likely to stay together
Heading to a new job? Don’t forget about your 401(k) plan
As many as 3.6 million people could be closer to debt forgiveness after these changes, according to the department. Around 40,000 borrowers may get immediate relief.
“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,” said U.S. Secretary of Education Miguel Cardona. “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.”
Outstanding student loan debt exceeds $1.7 trillion, burdening Americans more than credit card or auto debt. Tens of millions of people in the U.S. are in debt for their education and up to a quarter are in delinquency or default.
