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Published: Aug 16, 2023 6 min read
Photo Illustration of a question mark where the circle is a silhouette of a head with a graduation cap and money in the background
Money; Getty Images

After being burdened by federal student loans for more than two decades, hundreds of thousands of borrowers will finally see their debt slashed, and in most cases, completely forgiven.

Starting this week, the Department of Education is automatically forgiving nearly $39 billion of federal student loan debt for about 800,000 borrowers. The student loans are being discharged due to a one-time account adjustment for borrowers who have been in certain income-driven repayment plans (IDRs) for more than 20 years.

Typically, borrowers who are enrolled in IDRs should have their remaining student loan balances forgiven after 20 or 25 years of making payments, depending on the specific plan.

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“But because of errors and administrative failures of the student loan system that started long before I took office, over 804,000 borrowers never got the credit they earned and never saw the forgiveness they were promised — even after making payments for decades,” President Joe Biden said in a statement Monday.