The Biden administration has announced that it will forgive almost $40 billion in federal student loans for over 800,000 total borrowers enrolled in one of several income-driven repayment plans.
The spate of loan forgiveness is the culmination of several changes to income-driven repayment (IDR) plans made in April 2022—and the correction of endemic government errors in carrying out those changes. Under most IDR plans, borrowers pay a specific percentage of their income each month for a set number of years—usually 20 or 25 years—after which their remaining balance will be forgiven. Previously, payments were required to be on time and in full in order to count toward cancellation.
