More than 800,000 borrowers will have $39 billion in federal student loan debt eliminated under a government effort to remedy years of mistakes by the loan servicers that collect payments on the government’s behalf.
The relief will go to those with federal loans owned directly by the Education Department and who enrolled in income-driven repayment plans.
Under those plans, borrowers must make payments for a term that is typically 20 or 25 years.
More than eight million people use income-driven repayment plans, but for decades, many of the companies that bill borrowers made extensive mistakes in tracking payments and in guiding borrowers through the payment process.
“For far too long, borrowers fell through the cracks of a broken system,” Miguel Cardona, the education secretary, said on Friday.
Persons:
” Miguel Cardona
Organizations:
Education Department