New student-loan forgiveness plan could impact 18,800 Missourians

Missourians who have been making income-based student loan payments for at least 20 years may see their debt cleared within 30 days.

The change comes as the  U.S. Department of Education and the White House moves to fix “past administrative failures” that inaccurately tracked borrowers’ progress, the Biden administration announced last week.

Borrowers with income-driven repayment plans affected by the adjustment should receive an email. Their account balance will be updated within 30 days.

The federal government estimates 18,800 Missourians should receive this loan cancellation — totaling $956.8 million in student-loan debt.

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

Every two months for the next year, the federal government will update the account of borrowers who completed 240 or 300 qualifying monthly payments, depending on their loan. Then, all accounts should have up-to-date information.

Although the U.S. Supreme Court struck down the Department of Education’s plan to use the Higher Education Relief Opportunities for Students Act of 2003 to forgive up to $20,000 in student loans per person, the Biden administration is looking for ways to continue to spread relief.

“Republican lawmakers — who had no problem with the government forgiving millions of dollars of their own business loans — have tried everything they can to stop me from providing relief to hard working Americans,” President Joe Biden said in a news release. “Some are even objecting to the actions we announced today, which follows through on relief borrowers were promised, but never given, even when they had been making payments for decades.”

U.S. Sen Eric Schmitt accused the administration’s plan of being “unlawful” in a Twitter post and sent a letter to Cardona.

“I have already taken this administration to court once — and won — to stop illegal schemes that simply further an unfair bailout,” Schmitt wrote, referring to his appeal to the Supreme Court as Missouri’s former attorney general that overturned student-loan forgiveness.

This wave of loan cancelation will total $39 billion in debt relief for 804,000 borrowers nationwide, the Department of Education reported. The plan at the center of the Supreme Court case would have impacted the loans of 40 million Americans.