Biden: 40,000 Borrowers Could Have Student Loans Dismissed, Aid For 3.6 Million More

MINNEAPOLIS (WCCO) - Tiffany Calhoun and her husband have been chipping away at $70,000 of student loans for over a decade. Right now they pay $400 a month.

"It feels like it's one thing that's never going away," Calhoun said. "I definitely think something needs to be done."

According to the Education Data Initiative, more than 43 million Americans have federal student debt with loans topping more than $1.7 trillion.

This week the Department of Education says it will be taking two major steps to address what it calls historical failures in the administration of the federal student loan programs.

A review found some borrowers facing financial difficulties were placed into forbearance, violating regulations that require borrowers get clear and accurate information for options to stay out of delinquency. The department also found significant flaws in the income-driven repayment program.

The DOE says it will now review payment history and timelines for borrowers that work in public service, and take a closer look at the monthly payments for borrowers on income-driven plans.

President Biden's administration says 40,000 borrowers would eligible have their student loans be dismissed. At least 3.6 million people will receive at least three years additional credit toward income-driven repayment forgiveness.

"The department has not given a timeline on when borrowers will find out what happens," Student Borrower Protection Center policy director Persis Yu said. "So for right now, the answer is to be patient and wait."