For most people with federal student loans, the Supreme Court dashed their dreams of debt relief. Still, some borrowers are beginning to have their balances wiped away.

The US Department of Education recently began forgiving $39 billion in student debt for more than 800,000 borrowers that enrolled in income-driven repayment plans and had made monthly payments for at least 20 years. The Biden administration launched a one-time effort in April last year to correct administrative errors that had kept borrowers on the hook for repayments when their balances ought to have dropped to zero. Their clean slates are landing just as payments are set to resume on federal loans for the first time in more than three years.

Shannon Short, 52, had held student debt since he enrolled in college in 1988. Now, his $299,000 balance has been cut down to zero, thanks to what amounts to a record-keeping adjustment. The amount he owed had surged from $140,000 in 2005, and he was preparing to make monthly payments of about $700 a month when bills resume in October. 

“‚ÄčI sat there and cried for 20 minutes,” said Short, who lives in Los Angeles. “This has changed my whole financial future.”

IDR and public service loan forgiveness programs have for decades offered paths to getting balances eliminated, but record-keeping mistakes meant that low levels of debt have actually been wiped away, according to reports from the Government Accountability Office. The Biden administration is now trying to address longstanding frustrations by adjusting records so that qualifying borrowers could be eligible for getting their balances discharged, depending on their loan type. The program was separate from the flagship forgiveness plan that was announced in August last year and which by one estimate would have cost $400 billion.

At least $116 billion of relief for 3.4 million borrowers have been approved across a variety of programs, the administration said Monday. That's still a fraction of the $1.8 trillion total federal student debt balance, and the White House said in June it would explore a new path for forgiving some of these loans.

After Matthew Mittelstadt graduated in 2001, deferring his loans was the best option while he worked low-paying jobs. Forbearance helped him get by through until he started making consistent payments in 2010. Still, interest piled up and his balance climbed as high as $31,000 thanks to interest.

“There was a point where I had three jobs and it was barely enough to live,” he said.

For the 45-year-old underwriter at an insurance company, who lives in Boston, relief trickled out. He saw about half of his remaining $18,500 student-debt balance wiped earlier this week. Then, on Thursday, he logged into his account and realized the rest had also disappeared.

The IDR adjustment also discharged Indiana veterinarian Ward Phillips’ remaining $84,000 student debt balance this week. The 59-year-old had been paying down his $213,000 in borrowings since graduating in 1996. He’d been bracing for monthly payments of at least $500 to resume in October.

“It’s a relief to get it out of my mind,” Phillips said. “I was thinking I was going to die with these.”

This article was provided by Bloomberg News.