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The Trump administration has identified more than 40,000 borrowers eligible for federal student loan forgiveness in January, a recent court filing revealed.
More than 10,800 of the borrowers who qualified for the debt cancellation were enrolled in the U.S. Department of Education’s Income-Based Repayment Plan; another over 10,700 were in the Income-Contingent Repayment Plan; and 820 borrowers were enrolled in the Pay as You Earn Repayment Plan.
Those three programs are all known as income-driven repayment plans. IDRs limit a borrower’s monthly bill to a share of their discretionary income and cancel any remaining debt after a certain period, typically 20 or 25 years.
Another 18,160 federal student loan borrowers had their debts cancelled in January through the Public Service Loan Forgiveness program, the Education Department said in its recent court filing. Signed into law in 2007 by President George W. Bush, PSLF offers debt cancellation to those who’ve worked for 10 years at certain not-for-profit organizations or the federal government.
The January numbers suggest the Trump administration is increasing its efforts to ease the financial burden of student loan debt.
Amid a barrage of recent changes to the federal lending system and sweeping layoffs at the Education Department in March, many student loan holders have struggled to access the loan-forgiveness opportunities available under their borrowing terms.
More than 42 million Americans hold student loans, with total outstanding debt exceeding $1.6 trillion, according to the Congressional Research Service.
Education Department officials agreed to share status updates on the processing of student loan discharges as part of an October settlement with the American Federation of Teachers, a teachers’ union representing some 1.8 million members. The AFT sued the Trump administration last year, accusing officials of denying student loan borrowers their legal rights.
“Thanks to our lawsuit, 20,000 more teachers, nurses, firefighters and public service workers finally got their debt discharged,” said AFT president Randi Weingarten.
‘Golden emails’ on student loan forgiveness
The borrowers deemed eligible for IDR forgiveness in January have not yet had their debts discharged, Education Department officials said in the court filing. The department usually provides borrowers with a short period to opt out of the debt cancellation.
“These people should be getting their notices in February,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
“In fact, we have several clients who got the ‘golden email‘ this month,” Nierman said, referencing the term some borrowers use to describe the Education Department electronic message confirming their debt cancellation.
Backlog remains for affordable repayment plans
More than 626,000 federal student loan holders remain stuck in a backlog of applications for an affordable repayment plan, the Education Department reported. Many borrowers rely on IDR plans in order to afford their monthly payments, consumer advocates say.
However, the Education Department has made progress on processing the applications: Approximately 734,000 requests were pending in December, compared with nearly 1.4 million in July.
However, the PSLF buyback pileup continues to grow, with more than 86,520 borrowers in the queue in January, up from 83,370 in December and 80,210 in November.
The buyback option allows borrowers pursuing PSLF to retroactively pay for any months they missed because of a forbearance or deferment, accelerating their timeline to forgiveness.
The Education Department said in January it had approved 1,980 buyback applications.