The Education Department announced Friday it would automatically forgive student loans for more than 800,000 borrowers.
The action is a result of what the department calls a “fix” to income-driven repayment plans. It’s expected to total $39 billion in federal student loan forgiveness.
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The department said the move will address administrative issues in the income-driven repayment system. Under the plans, federal student loan borrowers are eligible for forgiveness after 20 or 25 years of payments, depending on the plan. But for some, qualifying payments that “should have moved borrowers closer to forgiveness were not accounted for,” it said in a news release.