With the 2024 presidential election on the horizon, the Biden-Harris administration is continuing its student loan debt relief efforts, this time approving nearly $5 billion.
Dr. Stella FloresUniversity of Texas at Austin
The relief comes as a result of the IDR Account Adjustment, a temporary federal initiative enacted by the administration that gives borrowers retroactive progress towards 10- to 25-year repayment terms under income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs.
The adjustments, which has been in the works for a few years now, apply to those currently or formerly on an IDR plan; in the PSLF program; or with William D. Ford Federal Direct Loan (Direct Loan) Program or federally owned Federal Family Education Loan (FFEL) Program loans, the Education Department (ED) stated on a webpage explaining the adjustment effort.
For the purposes of this change, repayment status is what is counted and adjusted for – the type of federal loan or repayment plan the borrower made payments under does not matter. And even some periods of forbearance, deferment, or default will count as progress.
Historically, the IDR and PSLF programs have received criticism for their complexity, lack of clarity, and manipulative practices from loan servicers, leading to borrowers continuing to pay their debts while not receiving forgiveness progress. Spending months in an ineligible payment plan would also not have counted towards progress, according to ED.
The announcement "makes clear that the administration is thinking about debt forgiveness on multiple levels, and pursuing as many strategies as possible to help make sure this economic and moral imperative gets done,” said Randi Weingarten, president of the American Federation of Teachers (AFT).
Last July, the adjustment resulted in the approval of $39 billion in student loan forgiveness to 804,000 borrowers. After a legal challenge that was ultimately dismissed, ED proceeded with the forgiveness effort.
