On Tuesday, the Biden administration announced plans to reform and expand its student loan forgiveness and income-based repayment programs.

As the Department of Education’s press release states, the changes will benefit over 3.6 million student loan recipients. According to Federal Student Aid, these forthcoming changes will also result in immediate debt cancellation for at least 40,000 people under the current Public Service Loan Forgiveness Program. The Department of Education noted it had many failures in the handling of its student loan program, and did not sufficiently support borrowers during the COVID-19 pandemic.

“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,” said U.S. Secretary of Education Miguel Cardona. “Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR (income-driven repayment) plans. These actions once again demonstrate the Biden-Harris administration’s commitment to delivering meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively.” 

The reform will also end the practice of “forbearance steering,” in which loan companies encourage borrowers to opt for a forbearance program over an income-dictated plan. This is despite how income-driven plans can result in borrowers paying $0 per month. Any forbearances of more than 12 consecutive months or 36 cumulative months will be counted toward a borrower’s eligibility for any loan forgiveness. Any payments made under other repayment plans will count towards forgiveness in the income-driven program.

The Biden administration has come under criticism for its handling of student loan repayments, which have been put on pause throughout the pandemic. In fact, earlier in April the administration announced plans to extend the pause until August 2022. An NPR investigation released this month showed that the IDR plans, which promise loan forgiveness after 20-25 years, have been poorly managed by the department and loan companies.