The U.S. Department of Education Is Working to Improve Student Loan Repayment Programmes
Student Loan

On Tuesday, the U.S. Education Department announced a slew of changes to its federal student loan repayment programs to address harmful practices by loan servicers, which were found to have steered borrowers into forbearance without outlining their other options and hampered their progress toward loan forgiveness by incorrectly tracking their monthly payments, according to investigations.

The changes are expected to result in immediate debt cancellation for 40,000 borrowers enrolled in the Public Service Loan Forgiveness program, as well as assisting 3.6 million borrowers in recouping at least three years of credit toward forgiveness under the income-driven repayment plan, which caps monthly payments at 10% to 20% of a borrower’s income and entitles them to loan forgiveness after 20 years of payments.

“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” Education Secretary Miguel Cardona said in a statement.

“Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness s to certain borrowers,” he said.

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