TBA Law Blog


Posted by: Stacey Shrader Joslin on Jul 17, 2023

The Department of Education last week began notifying more than 804,000 borrowers that they will have a total of $39 billion in federal student loans automatically forgiven. The move comes after the U.S. Supreme Court found that the administration exceeded its authority in creating a loan forgiveness program that would have benefitted 43 million individuals and forgiven up to $400 billion. The Education Department reports that the new plan relies on the Higher Education Act, which allows it to adjust qualifying payments that were not properly credited to student accounts. In a press release about the action, the department said the move is intended to “address historical failures in the administration of the Federal student loan program in which qualifying payments … should have moved borrowers closer to forgiveness [but] were not accounted for.”