Education Department issues account adjustments for federal student loan borrowers
$39 billion in federal student loans that will be automatically discharged by the end of the year
Published: 15 September 2023
More than 804,000 federal student loan borrowers could see a zero balance in their accounts by the end of the year. On June 30, the Supreme Court rejected the White House's student loan forgiveness program that would have canceled about $430 billion in debt, with an estimated 26 million people who would have all their remaining student loan debt canceled.
Now the U.S. Department of Education (USDE) plans to apply one-time account adjustments by the end of 2023 to all income-driven repayment (IDR) plan borrowers who've reached enough payments for forgiveness. All other borrowers will receive at least three additional years of credit toward IDR loan forgiveness in 2024.
The USDE said it will notify groups of loan forgiveness recipients by email about every two months. The first group of recipients was announced on July 14, so borrowers can expect the next announcement by mid-September.
The account adjustments apply to borrowers who are on an IDR plan or were on one in the past; in the Public Service Loan Forgiveness (PSLF) program; or not on an IDR plan but are interested and have direct or Federal Family Education Loan (FFEL) program loans held by the USDE.
More than 4.4 million borrowers have been repaying their loans for at least 20 years, and 2.3 million of these borrowers have never defaulted or been delinquent on their loans, according to USDE data from April 2022.