Over 15,000 in Louisiana to have student loans forgiven

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More than 15,000 Louisianians will have their student loan debt automatically discharged under the Biden administration’s changes to federal repayment plans.

The U.S. Department of Education announced last week that over 800,000 borrowers nationwide would have their remaining debt forgiven, wiping out about $39 billion in student debt.

The total debt wiped out for Louisiana borrowers is $834.7 million.

The relief comes through fixes to the U.S. Department of Education’s income-driven repayment plans. Many borrowers, including some who had been making payments for decades, were denied relief they were eligible for under the repayment plans.

“Over 800,000 student loan borrowers who have been repaying their loans for 20 years or more will see $39 billion of their loans discharged because of steps my Administration took to fix failures of the past,” President Joe Biden said in a press release last week.

“These borrowers will join the millions of people that my Administration has provided relief to over the past two years – resulting in over $116 billion in loan relief to over 3 million borrowers under my Administration,” Biden added.

Under the income-driven repayment plan, after 20 years of payments, a borrower’s loan is meant to be forgiven. But a 2021 report from the National Consumer Law Center found that while more than 4 million borrowers had been making payments for long enough to be eligible, but only 32 had their debts canceled under the plan.

The Department of Education announced plans to overhaul its income-driven repayment plan earlier this year. The new plan reduces monthly payments to 5% of a borrowers income – down from 10% – and decreased the repayment timeline for debt forgiveness from 20 or 25 years to 10 years if the initial loan is less than $12,000.

Biden’s announcement follows a ruling from the U.S. Supreme Court against the administration’s plan to cancel up to $10,000 in debt from 40 million borrowers and an additional $10,000 for Pell grant-eligible borrowers.

Approximately 13% of Americans have student loan debt, totalling more than $1.76 trillion.

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