The Answer: What to know as student loan payments resume

The Biden administration said it is forgiving $9 billion in student debt for 125,000 borrowers, a move that comes as student loan repayments are starting up again this month after a hiatus of more than three years. 

The debt cancellation is the latest push from the White House to erase some student loans in the wake of the Supreme Court's June ruling. The 6-3 decision by the court's conservative majority invalidated the administration's plan for broad-based student loan forgiveness, which would have helped more than 40 million borrowers erase up to $20,000 each in debt.

With that debt forgiveness plan struck down, the Biden administration has focused on other methods for relieving student debt, including creating a new income-driven debt repayment (IDR) plan as well as outright forgiveness for some qualified borrowers. Meanwhile, with millions of student borrowers resuming payments this month, there are reports of problems with loan servicers, ranging from long wait times for callers to customer service reps who can't answer questions.

Who is getting their student debt forgiven?

The Biden administration said it is forgiving debt for three types of borrowers:

• Public servants: About 53,000 borrowers who are enrolled in Public Service Loan Forgiveness programs will get $5.2 billion in forgiveness, according to the Education Department. These programs are open to people who work for the government or nonprofit organizations, with forgiveness available after 120 qualifying monthly payments and while working full-time for an eligible employer. These types of workers include teachers, law enforcement professionals and social workers. 
• People in IDRs: About 51,000 borrowers enrolled in IDRS and who have $2.8 billion in debt will get relief. IDRs reduce student loan monthly payments by pegging a person's payment amount to their income, but the Biden administration has said some of these programs hadn't accurately tracked payments made under the plans. Because of this, the Education Department said it is reviewing the plans and discharging debt for some borrowers who have been in repayment for more than 20 years but "never got the relief they were entitled to."
• Disabled borrowers. Another 22,000 borrowers with $1.2 billion in debt who have a total or permanent disability will get their debt discharged. The Education Department is finding these borrowers through a data match with the Social Security Administration.

When will people hear if their debt is forgiven?

Notices have already been sent out to those people in IDRs who are receiving forgiveness, according to the Education Department. 

The remainder will be sent within the next 30 days.

What is happening with broader student loan forgiveness?

The Biden administration is working on another plan for broad-based student loan relief through the Higher Education Act. But that process could take at least a year, and also could face legal challenges. 

In the meantime, the Education Department has been forgiving debt for specific types of borrowers, such as those in IDRs, with U.S. Secretary of Education Miguel Cardona on Wednesday noting that the administration has approved $127 billion in debt relief for about 3.6 million borrowers, including the latest round of forgiveness. 

The efforts are aimed at fixing a "broken student loan system," Cardona said in a statement.

In:
• Student Debt
• Student Loan
• Student Loans