Biden administration begins canceling student loans for 804,000 borrowers

Hundreds of colleges as of Monday. Thousands of student loan borrowers have received emails from servicers with the subject line "Your student loan has been forgiven."

The announcements are part of a previous announcement by the Biden administration to freeze loans for 804,000 borrowers who were eligible for payment plan help but have yet to receive loans because officials say the operation failed.

The emails started appearing on Monday, according to a confirmation notice from the lender obtained by ABC News.

All over 800,000 borrowers are expected to be notified about the relief in the coming weeks. As of Monday's close, the Department of Education said more than 200,000 people had received financial aid.

About 614,000 people are expected to have their student loans fully paid off, while others draw down their loans at various times.

This assistance is for people enrolled in the Repayment Repayment Program (IDR), which allows federal student loan forgiveness when the repayment period exceeds 20 or 25 years.

But due to documented errors in payment tracking, many borrowers enrolled in the IDR program failed to meet payment deadlines and therefore could not be forgiven.

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"Under these programs, if a borrower has 20 or 25 years to repay, the balance of his debt is forgiven. 804,000 borrowers didn't receive the loans they received, and he didn't see what he promised exempt - even after years of pay," Mr. Biden in a statement to ABC News.

"I'm trying to correct this mistake," he said.

Borrowers with an IDR program should receive an email from their lender with the subject line "Your student loan has been forgiven" with the message "Thank you! The Biden-Harris administration student accounts listed below have been forgiven [server name]

Education Secretary Miguel Cardona will speak at the K-12 Cybersecurity Summit in the East Room of the White House on August 8, 2023.

Brendan Smialowski/AFP via Getty Images

Government officials say the distribution of aid will be completed within weeks.

Can sue to block loan cancellations despite criticism from the New Civil Liberties Coalition, which represents the Cato Institute and the Mackinac Center for Public Policy, as more of the authority of the Department of Education. , rejected by a U.S. District Court judge. in Michigan.

Currently, the Department of Education is advancing a loan repayment program for borrowers.

“We represent borrowers who have done the right thing, but their progress on forgiveness doesn’t count because the Biden-Harris team has worked hard to correct failures in the past,” said Secretary of State Miguel Ka Miguel Cardona said in a statement.

Retaining the IDR program created by the Department of Education would result in a total of $39 billion in debt relief, ABC News previously reported.

Creditors say Monday's payment is "judgment overdue".

"The Biden administration delivered on a recent promise to the 800,000 people whose mortgage system is still failing. For these borrowers, the hope of a protracted trial will change their lives," said Deputy Director and Chief Director Persis Yu. Student Loan Protection Center.

Fans Like Rep House Education and Labor Committee Chairman Virginia Fox says it's a waste of taxpayer money.

"The Biden administration's political attempt to circumvent the Supreme Court is disgraceful. "The Biden administration is breaking the law, harassing creditors, and harassing taxpayers in pursuit of headlines," he said in a statement when the plan was announced last month. The judge thought he had overstepped his authority.

The program, a Biden campaign promise, would freeze $10,000 to $20,000 in federal loans for low-income people.

The White House has since announced a new IDR program that reduces monthly payments from 10% to 5% of income and reduces the payment grace period from 20 years to 10 to 25 years. If the first number. Under $12,000.

The Department of Education is also working on legislation to try to pass another piece of legislation, the Higher Education Act, to forgive loans, though it faces legal challenges.

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