https://www.reuters.com/world/us/us-forgives-40000-student-loans-provides-aid-millions-more-2022-04-19/

 
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April 19, 20229:16 PM UTCLast Updated ago

  *  
    United States

U.S. forgives 40,000 student loans, provides aid to 3.6 million more

By Daniel Trotta

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2 minute read
Parade participants protesting against high student loan burdens are
preparing to take part in the annual July 4th parade at Ashland

Parade participants protesting against high student loan burdens are
preparing to take part in the annual July 4th parade at Ashland,
Oregon, U.S. on July 4, 2015. REUTERS/Randall Mikkelsen/File Photo

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April 19 (Reuters) - The U.S. Department of Education has canceled
student loan debt for 40,000 people and offered credits to help
another 3.6 million pay off their loans under a plan announced on
Tuesday designed to aid low-income borrowers and public servants.

"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," Education Secretary Miguel Cardona said in the
statement.

The measures add to other steps taken by the administration of
President Joe Biden, including a pause on nearly all student loan
collection, but they stop short of demands from the progressive wing
of the Democratic Party for comprehensive student loan forgiveness.

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In his 2020 presidential campaign, Biden called for canceling $10,000
in student loan debt for each borrower, a commitment of more than
$400 billion. Since he was elected, the White House has said Congress
must take action for wider student loan relief.

The government said it was addressing "historical failures" to
communicate to borrowers all the benefits they were eligible for in
federal student loan programs.

At least 40,000 borrowers will receive immediate debt cancellation
under the Public Service Loan Forgiveness (PSLF) Program.

Several thousand borrowers with older loans will also receive
forgiveness through income-driven repayment (IDR) forgiveness, plus
another 3.6 million borrowers will receive at least three years of
additional credit toward IDR forgiveness, the Education Department
said in a statement.

Those programs cap the amount lower-income borrowers are required to
pay and forgive the remaining balance after a set number of years.

Student loan debt is seen as a drag on the economy, burdening young
professionals for years after graduation, while the wide availability
of loans has contributed to rising tuition.

Some 43.4 million borrowers are carrying about $1.6 trillion in
outstanding student loans from the Federal Loan Portfolio, an average
of more than $37,000 each, according to the Education Data
Initiative.

The Biden administration canceled more than $17 billion in debt for
725,000 borrowers in its first year in office while also extending a
pause on loan repayment that has provided at least temporary relief
for 41 million borrowers, the Education Department said.

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Reporting by Daniel Trotta; Editing by Sandra Maler

Our Standards: The Thomson Reuters Trust Principles.

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