President Joe Biden and I are committed to delivering relief to student loan debt borrowers to help them move forward with their lives – whether they want to start a family, buy a home, or become an entrepreneur. Today, we are taking another historic step by forgiving $39 billion in student loan debt for 804,000 borrowers who have been paying down their debts for 20 years or more and should qualify for relief. Instead, many were placed into forbearance by loan servicers in violation of the rules, and others did not get appropriate credit for their monthly payments. Addressing these harmful practices and reducing student loan debt has been a priority throughout my career. As California Attorney General, I won $1 billion for defrauded veterans and students by taking on predatory for-profit colleges.
The forgiveness is the result of a promise made last year by the Biden administration in response to years of complaints, lawsuits and an NPR investigation that found that many long-time borrowers who should have qualified for loan forgiveness under the rules of the government's income-driven repayment plans (IDR) hadn't received it because of mismanagement by the department and loan servicers.
Friday's announcement is a smaller step the Biden administration is taking to pursue federal student loan relief with existing authority.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a statement. “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve.”
In April 2022, an NPR investigation, built on unreleased Education Department documents, revealed yet more problems with the department's handling of these IDR plans, including that several loan servicing companies weren't actually tracking borrowers' progress toward forgiveness (which the department knew) and that payment histories were often damaged and incomplete after borrowers were transferred from one servicer to another, a common practice.
"The hypocrisy is stunning, and the disregard for working and middle-class families is outrageous," he added.
A Biden administration official said that they are “confident" in the Education Department's "legal authority" to implement Friday's announcement.
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