President Biden says his administration is taking “another major step” in student debt handouts as the Department of Education will start emailing tens of millions of Americans informing them of potential options heading their way around the time of the presidential election.
The Department of Education says “all borrowers with at least one outstanding federally held student loan” should expect a message in their inbox notifying them that “they have until August 30 to call their servicer and opt out if they do not want this relief” — the rules of which are expected to be finalized by the department this fall.
“These rules, if finalized as proposed, would bring the total number of borrowers eligible for student debt relief to over 30 million, including borrowers who have already been approved for debt cancellation by the Biden-Harris Administration over the past three years,” the department said in a statement, adding that the “email does not guarantee specific borrowers will be eligible.”
The largest group potentially seeing handouts are borrowers who now owe more money than they did at the beginning of the repayment of their loans due to what the Department of Education describes as “runaway interest.”
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“More than 25 million borrowers owe more than they originally borrowed, including many who have made years of payments, due to the interest that accrues on Federal student loans,” it said in April.
Officials say one proposed rule that would assist this group would “permit automatic relief of up to $20,000 of the amount by which a borrower’s loans currently exceed what they owed upon starting repayment,” while another would allow Secretary of Education Miguel Cardona to “forgive the full amount by which a borrower saw their balance grow after entering repayment if the borrower is enrolled in any Income-Driven Repayment plan and has annual income equal to or below $120,000 if they are single or $240,000 if they are a married couple that files taxes jointly.”
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An additional proposed rule would provide relief to “an estimated 2.6 million borrowers who still have outstanding debt on old loans that entered repayment at least two decades ago,” according to the Department of Education.
“Today, my Administration took another major step to cancel student debt for approximately 30 million Americans,” Biden said in a statement Wednesday. “By providing more information to borrowers on how they can take advantage of our upcoming debt relief programs, borrowers will be prepared to benefit swiftly once the rules are final.”
“Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years,” Biden added. “That includes canceling student debt for nearly 5 million Americans so far through various actions; providing the largest increases to the maximum Pell Grant in over a decade; fixing Income-Driven Repayment so borrowers get the relief they are entitled to under the law; and holding colleges accountable for taking advantage of students and families.”
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