The U. S. Department of Education says it will retroactively help millions of federal student loan borrowers who have been hurt and held back by its troubled income-driven repayment (IDR) plans, calling the plans' longstanding flaws and mismanagement "inexcusable."Tuesday's announcement comes after years of complaints and lawsuits and, most recently, an NPR investigation that revealed that these IDR plans, which promise affordable monthly payments as low as $0 and loan forgiveness after 20-25 years, have been badly mismanaged by the department and the loan servicing companies it employs.
"Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plans," U. S. Education Secretary Miguel Cardona said in a statement. The department estimates that the changes will result in immediate debt cancellation for at least 40,000 borrowers who will now qualify for Public Service Loan Forgiveness. In addition, several thousand borrowers will now qualify for debt cancellation under IDR.
This follows a 2021 revelation that, at the time, 4.4 million borrowers had been repaying their loans for at least 20 years but only 32 had had debts canceled under IDR. As a result of Tuesday's news, millions more borrowers will also receive months and, in some cases, years of new credit toward eventual cancellation.
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