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 $20,000 loan forgiveness program. The Department of Education has been working on a new approach under the Higher Education Act of 1965, which will target specific groups of borrowers in need of debt relief due to hardship or interest accrual. The president is expected to announce the new proposals, aimed at easing the burden on borrowers, during a trip to Wisconsin on Monday.
The proposed rules would need to go through a public comment period before being finalized, but some aspects could potentially be implemented as early as this fall. While the new student loan forgiveness program is based on a different legal authority, it may still face legal challenges if the administration is sued. The White House has declined to comment on the new actions, which required a formal rulemaking process known as “negotiated rulemaking.”
Negotiators considered various groups of borrowers eligible for debt relief under the new program, including those with larger balances than their original borrowing, those in repayment for at least 25 years, and those who attended career-training programs with high default rates or excessive debt loads. The proposals aim to provide relief to young voters and borrowers who continue to feel financial strains from high student loan debt. A recent poll by KFF found that 32% of registered voters consider student loan debt to be “very important” for presidential candidates to address, with higher importance among younger voters.
In response to the Supreme Court’s rejection of the initial loan forgiveness program, Biden’s administration has implemented measures to help certain groups of borrowers qualify for debt forgiveness under existing programs. About 4 million people have had their federal student debt canceled under Biden, totaling around $144 billion, but this is only a fraction of the amount that would have been canceled under the rejected program. The new proposals could provide a political boost for the president as he addresses the concerns of young voters and borrowers struggling with student loan debt.
Overall, the Biden administration’s efforts to address student loan debt reflect a commitment to finding solutions for borrowers facing financial hardship. The proposed new regulations, aimed at easing the burden of student debt for specific groups of borrowers, will provide relief to those struggling to repay their loans. By engaging in a formal rulemaking process and seeking input from various stakeholders, the administration is taking steps to ensure a comprehensive and targeted approach to addressing the challenges faced by borrowers. The upcoming announcement of the new proposals will shed light on the administration’s continued efforts to address the issue of student loan debt and provide relief to those in need.
