The Biden administration is preparing new proposals to reduce or cancel student loan debt for millions of borrowers, following the Supreme Court’s rejection of the original student loan forgiveness program. The Department of Education is working on a new plan based on the Higher Education Act of 1965, which will be more targeted and specific in identifying groups of borrowers eligible for debt cancellation, particularly those facing financial hardship or significant interest accrual. The president is expected to announce these new proposals on Monday during a visit to Wisconsin, but it may take some time for the rules to go into effect, pending a public comment period.
The new student loan forgiveness program is expected to face legal challenges, although it is based on a different law than the one overturned by the Supreme Court. The White House has not commented on the new actions, which were developed through a negotiated rulemaking process involving outside negotiators representing borrowers, schools, and student loan servicers. The proposed groups eligible for debt relief include borrowers with balances exceeding their original amount borrowed, those who entered repayment at least 25 years ago, attendees of career-training programs with high debt loads or low earnings, and individuals experiencing financial hardship.
The new proposals could provide a boost for Biden among young voters and borrowers, who are increasingly burdened by student loan debt. The issue is seen as very important by a significant portion of registered voters, especially those in the 18-29 age group. Biden has already taken steps to provide relief to specific groups of borrowers, such as public-sector workers and defrauded students, under existing programs. About 4 million people have had their federal student debt canceled under Biden, totaling $144 billion, although this is less than what would have been offered by the initially rejected forgiveness program.
Overall, the expected new proposals aim to address the ongoing student loan debt crisis and provide relief to those who are struggling financially. The administration’s efforts to develop a targeted and specific debt cancellation plan through a different legal authority reflect a commitment to finding solutions to this pressing issue. As the proposed rules go through the regulatory process and potential legal challenges, the Biden administration hopes to provide meaningful assistance to borrowers facing hardship and high levels of student loan debt, in order to alleviate financial burdens and promote economic stability for millions of Americans.
