PITTSBURGH (TNS) — Almost 30,000 Pennsylvanians who have been on student loan income-driven repayment plans for decades could soon see relief under the Biden administration’s new forgiveness plan.

The plan, announced weeks after the Supreme Court struck down a separate student loan forgiveness proposal, would allow $39 billion in federal student loans to be automatically wiped out for 804,000 people in the coming weeks, including almost $1.3 billion accrued by Pennsylvania residents.

“It’s going to affect everyone positively,” Jamie Kosh, president of the Pennsylvania Association of Student Financial Aid Administrators, said. “Pennsylvania borrowers are certainly going to benefit from anything they can do with these adjustments.”

The administration’s proposal makes changes to existing income-driven repayment plans to ensure those who qualify for forgiveness receive it.

Traditionally, borrowers on income-driven repayment plans are eligible for forgiveness after about 20 to 25 years of repayment, or after making 240 or 300 monthly payments. But over the years inaccurate payment counts have caused borrowers to lose progress toward loan forgiveness. In addition to making up for those miscounts, the administration’s plan also addresses concerns about practices by loan servicers that put borrowers into forbearance in violation of U.S. Department of Education rules.

Updates to the plan would allow borrowers to return to the “agreement they signed up for when they entered these income-driven repayment plans,” Linda DeAngelo, an associate professor of higher education and a faculty fellow at the Center for Urban Education at the University of Pittsburgh.

Ultimately, Mr. Kosh said, it will help ensure that borrowers who previously fell “through the cracks” are eligible for relief.

“By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve. … The Administration will not stop fighting to level the playing field in higher education,” U.S. Secretary of Education Miguel Cardona said in a statement.

Mr. Kosh noted that income-driven repayment plans like the one proposed have not been challenged in the past. He does not expect the proposal to receive pushback.

But it comes on the heels of the Supreme Court ruling, which overturned a program first announced in August that would have wiped out billions of dollars in student loan debt based on someone’s income and marital status. It received swift pushback from Republican-led states that questioned whether President Joe Biden had overstepped his authority.

The plan was based on the Higher Education Relief Opportunities for Students Act of 2003, which allows the education secretary to waive regulations related to student loans during times of war or national emergency. The act was used by the Trump and Biden administrations during the pandemic to pause federal student loan repayments and interest.

Following the ruling, Mr. Biden said his administration would start a new effort to cancel student debt based on the Higher Education Act of 1965, which works to strengthen educational resources at colleges and universities and provides financial assistance for students in postsecondary and higher education.

“Unfortunately the forgiveness did fail to pass but President Biden has said this isn’t the end of it,” Mr. Kosh said. “He’s going to try other ways through the Higher Education Act and negotiated rulemaking and things like that to try to bring relief to student loan borrowers. We’re still optimistic things are going to happen.”

Ms. DeAngelo said the Biden administration’s announcement around income-driven repayments is part of a “whole package of things.”

She pointed to the recently announced Saving on a Valuable Education plan, or SAVE, which replaced the existing Revised Pay As You Earn plan. SAVE, an income-driven repayment plan, calculates borrowers’ monthly payment amount based on income and family size. It provides the lowest monthly payments of any income-driven repayment plan.

“These are efforts to have [borrowers’] loan payments be things that won’t keep them from being able to have basic needs met,” Ms. DeAngelo said.

Those currently receiving notifications about debt relief include those with Direct Loans or Federal Family Education Loans held by the U.S. Department of Education including Parent PLUS loans. Department officials will continue notifying borrowers who reach applicable forgiveness thresholds every two months until next year when all borrowers who are not yet eligible will have their payment counts updated.

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