Prior to this move, student loan debt—unlike credit card bills, medical bills, and most other forms of debt—was not eligible to be automatically wiped away when a person filed for bankruptcy.
Friday’s announcement is just the latest round of student debt cancellation enacted by the Biden administration, which has approved relief for more than 4.3 million people so far, including 82,410 people in North Carolina.
The new proposal will focus on providing debt relief to those with older loans or loans with large sums of interest; those with high-cost, unavoidable child care or health care expenses; borrowers who are highly likely to default; and others who face “financial hardship.”
More than 48,000 North Carolinians have had their student debt discharged or have been identified for debt relief due to the Biden administration's reforms of the student loan debt system.
This round of debt relief will eliminate the debt of 125,000 borrowers nationwide: 22,000 with disabilities, 51,000 through an income-driven repayment plan, and 53,000 through the Public Service Loan Forgiveness program.
