Nearly 9,500 Mississippians will see their student loans automatically discharged following changes made by the U.S. Department of Education to its income-driven repayment program — a small portion of the more than 439,000 Mississippians who hold student loan debt. 

The move, which President Joe Biden’s administration unveiled last year, comes on the heels of the U.S. Supreme Court striking down his student loan forgiveness plan. The administration’s changes to the income-driven repayment program are related but ultimately separate from that plan and have not yet led to court challenges. 

The changes are an attempt to rectify past issues with the program, the administration said, that led to borrowers not receiving the loan forgiveness that they should have. 

“I have long said that college should be a ticket to the middle class, not a burden that weighs down on families for decades,” Biden said in a statement. “My Administration is delivering on that commitment.” 

Income-driven repayment plans peg a borrower’s monthly payment to a percentage of their income for a period of 20 or 25 years, at which point the leftover balance is forgiven. 

Despite this plan being used by more than 8 million Americans, relatively few have received forgiveness due to mistakes by loan services in tracking errors, according to the New York Times

Loan services were also routinely steering low-income borrowers away from income-driven repayment plans and into forbearance, which allowed interest to accumulate. That was one of the issues at stake in the settlement with Navient, which no longer services student loans, that some Misssissippians qualified for last year

For the Mississippans who qualify, the rub is that loan forgiveness in this state is counted as taxable income. Borrowers in Mississippi could be on the hook for tens of thousands of dollars in taxes, depending on the amount of their leftover balance. 

bill was introduced this legislative session to prevent that from happening, but it died in committee. 

READ MORE: ‘Mississippi plans to tax student debt relief. But Paycheck Protection Program loans are tax exempt.’ 

Molly Minta covers higher education for Mississippi Today, in partnership with Open Campus.

Higher education reporter at Mississippi Today in partnership with Open Campus.