PHOENIX — Gov. Katie Hobbs has announced that $429 million in medical debt has been erased for hundreds of thousands of Arizonans.

Undue Medical Debt, a national nonprofit, has a $10 million contract with the state to buy and cancel medical debt for Arizonans using federal COVID relief dollars. The group has so far spent $2 million to help more than 352,000 Arizonans.

"So that return on investment is actually pretty impressive — over, you know, $200 for every $1 that we spend," said Courtney Story, the group's vice president for government initiatives.

Undue Medical Debt purchased medical debt in bulk from hospitals and collection agencies for pennies on the dollar.

The nonprofit plans to announce more debt cancellations later this year and expects to spend the rest of the money by the end of next year, Story told ABC15.