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Thousands may have student debt that should have been forgiven, report finds

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A student walks near Royce Hall on the campus of UCLA in Los Angeles, California. (Credit: Kevork Djansezian/Getty Images) Created in 1994, the income-driven repayment program was meant to provide a safety net for people who struggle to repay student loans.

The program now offers five repayment options that provide reduced monthly payments based on income and family size. The balance is supposed to be automatically forgiven after 20 or 25 years, depending on the plan.Among more than $1 trillion in student debt held by the federal government, about half is being repaid through those plans.The number of loans eligible for forgiveness through the program is expected to balloon in coming years, according to the GAO .

By 2030,the office estimates, up to 1.5 million loans held by 600,000 borrowers could meet the conditions for forgiveness.In a response to the report, Education Department officials acknowledged the failures of the program and promised improvement.

They also acknowledged the need to act quickly."We recognize that it is important to get payment counting correct now, as the number of loans that have been in repayment long enough to qualify for loan forgiveness will only grow over time," wrote Richard Cordray, chief operating officer for Federal Student Aid, the office that oversees student loans.RELATED: Biden administration’s new student loan forgiveness steps could impact 4M borrowersHe added that the program has "long been a source of confusion and frustration for many borrowers."Cordray agreed to a list of changes recommended by the GAO.

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