We just got a fresh sign that Biden’s plan to give millions of student-loan borrowers who fell behind on payments a shot at debt relief is working
Ayelet Sheffey
February 16, 2023
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The New York Fed found that $34 billion in delinquent student loans were marked current in the last quarter of 2022.
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That’s thanks to Biden’s “Fresh Start” plan, which aimed to restore defaulted borrowers to good standing.
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The plan will remain in place for a year after student-loan payments resume.
President Joe Biden’s broad student-loan forgiveness may be paused, but another relief plan is working.
On Thursday, the New York Federal Reserve released its quarterly report on household debt and credit, which analyzes how consumers are faring with various forms of debt. While it found that total debt balances grew by $394 billion in the fourth quarter of 2022, with mortgage and credit card debt driving the increases, student loans were not a significant contributor to the increase.
In fact, student-loan borrowers who were previously behind on their payments — or delinquent — saw their conditions improve in the last quarter thank to President Joe Biden’s “Fresh Start” plan. The plan, first announced in April 2022, would return the approximately 7.5 million borrowers in delinquency or default to good standing before they would have to reenter repayment, allowing them to access targeted forgiveness and repayment plans like Public Service Loan Forgiveness and income-driven repayment.
