(C) Minnesota Reformer
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Thousands of Minnesota borrowers to have student loans forgiven under new Biden effort [1]
['Christopher Ingraham', 'More From Author', '- July']
Date: 2023-07
Nearly 14,000 Minnesota borrowers will have their federal student loans automatically forgiven in the coming weeks, according to new data released by the Department of Education.
The debt cancellation is a result of the Biden administration’s effort to fix errors in the way the government previously handled loans under income-driven repayment plans. Those plans allow borrowers to pay a fixed percentage of their income over a set period of time, typically 20 or 25 years.
In a press release, Education Secretary Miguel Cardona said that the Department of Education had failed to credit previous qualifying payments that should have counted toward borrowers’ repayment periods. “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Cardona said.
A 2021 report from the National Consumer Law Center found that millions of borrowers had been making payments for more than 20 years, but only 32 individuals had received the cancellation promised by income-driven repayment plans.
Nationwide, 800,000 borrowers will have their student debt wiped out as part of the new forgiveness effort. Those borrowers should begin automatically receiving notifications in the coming days. Roughly $39 billion in debt will be canceled overall.
In Minnesota, $645 million in student loan debt will be forgiven. The 14,000 borrowers affected are just a fraction of the 700,000 who would have qualified for Biden’s broader forgiveness program that was recently struck down by the Supreme Court.
Millions of Americans are now carrying student loan burdens throughout the entirety of their working lives. Roughly 1-in-8 Americans between the ages of 50 and 61 are still paying off student loans, according to a recent analysis by the Washington Post, as are 4% of those age 62 and older.
“I have long said that college should be a ticket to the middle class — not a burden that weighs down on families for decades,” Biden said in a statement announcing the debt forgiveness.
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[1] Url:
https://minnesotareformer.com/briefs/thousands-of-minnesota-borrowers-to-have-student-loans-forgiven-under-new-biden-effort/
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