President Joe Biden is making another attempt at student loan cancellation in order to fulfill a key campaign promise. After the Supreme Court rejected his first plan for widespread cancellation, Biden has unveiled a new proposal that focuses on providing relief to more than 30 million Americans who are struggling with student loan debt. The plan is more targeted than his original proposal and uses a different legal authority, the Higher Education Act, to waive student loan debt in certain cases.
The new plan targets five categories of borrowers, including those who have seen their debt increase due to unpaid interest, borrowers eligible for federal forgiveness programs, individuals who have been repaying loans for 20 years or more, those who attended low-value college programs, and Americans facing financial hardship. Eligible borrowers could have up to $20,000 in interest canceled, and all debt would be canceled for specific groups of borrowers. Most of the cancellation would be done automatically, with the exception of borrowers who need to apply individually to demonstrate hardship.
The Biden administration aims to start canceling some debt as soon as this fall, including interest that has accumulated on borrowers’ loans. This timeline would require the Education Department to release a formal proposal in the coming months, followed by a public comment period and potential early implementation. While the administration is confident that the plan complies with the Higher Education Act, conservative opponents are likely to challenge it in court, potentially causing delays or halting the cancellation altogether.
Republicans have opposed Biden’s plan for student loan cancellation, arguing that it unfairly benefits certain borrowers at the expense of taxpayers who repaid their loans or did not attend college. Legal challenges could arise, potentially resulting in the plan being put on hold until after the November presidential election. If cancellation is reversed after loans have been forgiven, it could present logistical and political challenges, as well as potentially being subjected to court decisions on how to handle reinstated debt.
Overall, the new student loan cancellation plan proposed by President Biden aims to provide relief to millions of Americans burdened by student loan debt. While the administration is hopeful that the plan will be implemented successfully, challenges and legal hurdles may arise that could impact the timeline and execution of the proposal. Ultimately, the fate of the plan and the possibility of loan cancellation being reversed will depend on legal proceedings and decisions made by the courts.
