The Biden administration says it wants to clean up the federal student loan system through which 45 million Americans possess education debt. It is waiving the rules of income-driven repayment plans to retroactively credit millions of people with additional payments toward loan forgiveness.
The plans cap monthly payments at a percentage of earnings, with the promise that the balance will be forgiven after 20 or 25 years. Investigations of the program, including one released Wednesday by the Government Accountability Office, found widespread breakdowns in communication between the Education Department, its loan servicers and borrowers dating back decades. Poor record-keeping and misleading information may have resulted in people repaying their loans for much longer than needed.
Now, the department is trying to remedy the problems by giving borrowers a better chance of having their debt canceled faster.