April 20, 2022
By: Freedom to Prosper Team
After years of complaints, the U.S. Department of Education announced it will retroactively help millions of federal student loan borrowers who were impacted and held back by income-driven repayment (IDR) plans. DOE called the IDR flaws “inexcusable.”
The IDR plans originally promised affordable monthly payments as low as $0 and student loan forgiveness after twenty or twenty-five years. An NPR investigation revealed that these plans were poorly mismanaged by the DOE and the loan servicing companies.
Over 40,000 student loan borrowers who qualify for Public Service Loan Forgiveness (PSLF) will have their loans immediately cancelled, and millions more will receive “credit” towards their loan payments.
This credit results in a reduction in the term of the loan by at least three years, impacting approximately 3.6 million borrowers. So for those in Public Service Loan Forgiveness, that could mean repayment takes seven years instead of ten, or seventeen years instead of twenty, for example.
This good news for student loan borrowers signals the Biden Administration is focused on real student debt relief for millions of Americans. Progress is incremental but providing millions of families economic relief – now. Join our movement for full student debt cancellation by adding your name here.
Read more about the announcement here:
Back to All Posts
Sign our pledge to show that you support debt freedom!
Student debt impacts millions of people, of all ages.
What would you do if you were free from the student debt trap? How would your life be different?Submit Story