Biden administration to forgive student loan debt for 25,000 North Carolinians

Student debt relief is on its way to North Carolinians.

The Biden Administration released state-by-state numbers Tuesday, mapping out the $39 billion available to borrowers eligible for student loan relief. These fixes to Income-Driven Repayment plans will forgive more than a billion dollars in loans taken out by nearly 25,000 North Carolinians. 

Income-driven repayment plans set monthly student loan payments based on annual earnings and family size. The plan is intended to help people whose loan payments are high compared to their income. 

Since Friday, over 804,000 borrowers began to be notified of their debt being forgiven, according to the U.S. Department of Education.

The announcement comes after the U.S. Supreme Court struck down Biden’s student loan forgiveness plan because of its potential financial impacts on the states. 

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Miguel Cardona, U.S. Secretary of Education, said in a press release. 

“Today, the Biden-Harris Administration is taking another historic step to right these wrongs and announcing $39 billion in debt relief for another 804,000 borrowers. By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans. This Administration will not stop fighting to level the playing field in higher education,” Cardona said.

The debt relief changes correct mistakes made in the execution of the federal student loan program. In the past, qualifying payments made under Income-Driven Repayment plans should have moved borrowers closer to loan forgiveness – but they have yet to be accounted for. Depending on their loan type and repayment plan, borrowers can be deemed eligible if they have 20 or 25 years of qualifying months. That adds up to 240 or 300 qualifying monthly payments. 

Over $1 billion of student loans taken out by eligible North Carolina borrowers is expected to be forgiven. They can expect their discharges to be processed about 30 days from the date that they are notified. In the meantime, those receiving forgiveness will have repayment on those loans paused. 

There are many initiatives on Capitol Hill geared toward helping North Carolina student loan borrowers reach their economic goals. U.S. Reps. Deborah Ross (2nd District) and Alma Adams (12th District), both Democrats, have championed the Clean Slate Legislative Series, including the following three bills: the Clean Slate Through Consolidation Act; the Clean Slate Through Repayment Act; and the Student Loan Rehabilitation and Credit Score Improvement Act.

In a press conference, Rep. Adams noted that relief would benefit people of all political affiliations.

 “Education is not a partisan issue,” she said. “This debt issue is not a partisan issue. All of the folks who have had an opportunity to go and get an education are not Democrats, so it is not a partisan issue, it will impact not only families but our economy. If we are going to build a stronger economy, we need to have these individuals be able to participate.”