Along with the announcement last week that the ongoing payment pause on federal student loans would be extended for another four months, the Biden administration also offered good news to borrowers who were behind on their debt prior to the pandemic.
The U.S. Department of Education says it will move to pull millions of loan holders out of default and mark their accounts as current.
Even before the public health crisis, repayment troubles were common among student loan borrowers.
The country’s outstanding education debt balance exceeded $1.7 trillion and posed a larger burden to households than credit card or auto debt. Roughly a quarter of loan holders — or 10 million people — were estimated to be in delinquency or default, and now stand to benefit from the announcement.