Plot Twist: Student-Loan Forgiveness Isn't Dead After All, Thanks to Biden

Just last month, the conservative-leaning Supreme Court blocked a plan to relieve student-loan debt in the U.S.. At the time, President Biden’s Twitter fingers got active, swearing the fight wasn't over and that his administration wasn't giving up on its goal.

His next political chess move, apparently, is to blame the government's mismanagement of income-driven repayment plans, which should have offered loan-forgiveness options to borrowers along the way, but didn't. Now, the Department of Education is sending out notices to about 804,000 borrowers, telling them their debt will be erased to the tune of $39 billion total.

NPR reported previously on the failures of the IDR program, which did not help out low-income borrowers as it should have. It was supposed to offer management of monthly payments for those borrowers and loan cancellation after 20 to 25 years of payments. Apparently, the program was not keeping track of when borrowers would qualify for loan cancellations; only 32 borrowers out of 4.4 million had their debts canceled. Yikes.

Related: Dear Biden: Student Loan Forgiveness Is Only Foreplay

The complicated nature of applying for IDR assistance, as well, contributed to borrowers being steered to other types of loans by finance companies.

The $39 billion debt erasure will be a one-time event for those who've made enough payments to qualify for the cancellation. They won't have to apply for the debt relief; it should happen automatically. Those who don't qualify for debt cancellation might still have their loans readjusted and the process may continue through next year, according to the New York Times. In total, about 8 million people are on these IDR plans.

Related: Republicans Aren't Done Blocking Black Students From Getting College Educations

While $39 billion may sound like a lot, it doesn’t even make up one-tenth of the $400 billion plan Biden proposed before the Supreme Court—in peak player-hater fashion—struck it down, claiming the president lacked the authority to carry it through.

Many borrowers will begin making payments on their student loans again in September after a long pause in payments caused by the pandemic.