A respite for low-income borrowers and public servants.
The Department of Education declared Tuesday the cancellation of student loan debt for 40,000 people.
Additionally, the department offered credits to help 3.6 million pay off their loans.
Current scenario
After extending the moratorium on student loan debt repayment till August, lawmakers are now pushing for the government to cancel $50,000 in debt per borrower.
The backstory
President Joe Biden had pledged to forgive $10,000 in student loan debt per person during his presidential campaign.
Failure in communication
The government addressed “historical failures” in communicating all the benefits borrowers were eligible for in federal student loan programs.
The Education Department is also trying to end forbearance steering—placing borrowers into forbearance without providing adequate information about their alternatives.
According to the Department of Education's statement, it has found “significant flaws that suggest borrowers are missing out on progress toward IDR forgiveness.”
“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,” stated Miguel Cardona, Education Secretary.
Loan debt per person
The average federal student loan debt is $37,013, according to data compiled by the Department of Education.