The Biden administration has unveiled a new plan to forgive student loan debt, with officials suggesting that millions of Americans could start receiving debt relief as early as this fall. This is the second attempt by President Biden to implement broad student loan forgiveness, after his first plan was struck down by the Supreme Court last summer. The new proposals, when combined with previous actions taken by the administration, could benefit over 30 million Americans, with nearly 70% of federal student loan borrowers potentially seeing their debt reduced or canceled.
The finalized plans for student loan forgiveness must still undergo a lengthy process and potentially legal challenges before they can be implemented. Biden’s new proposals may lead to another fight with Republicans, who sued the administration over the first student forgiveness program, claiming executive overreach. Despite the setbacks, the administration is committed to canceling student loan debt for as many borrowers as possible, according to White House press secretary Karine Jean-Pierre.
After the initial setback from the Supreme Court, Biden vowed to find another avenue to deliver student loan debt relief. The Department of Education has been engaged in a formal process known as negotiated rulemaking to develop a new forgiveness program targeting specific groups of borrowers. The new proposals aim to provide relief to borrowers who have accrued interest surpassing their initial loan balance, those who qualify for existing forgiveness programs but have not applied, borrowers in repayment for at least 20 years, those in low-value programs, and those facing financial hardship.
The proposed plans unveiled Monday will undergo a public comment period before the Department of Education reviews and publishes a final version of the rule. If the final rule is published after the negotiated rulemaking process by November 1, it could take effect on July 1, 2025, with the possibility of parts being implemented earlier. The Department of Education could potentially start canceling accrued interest for qualifying borrowers this fall, according to the White House, demonstrating a commitment to providing relief to borrowers in need.
Despite the Supreme Court rejecting Biden’s initial student loan forgiveness plan, his administration has still managed to cancel more student loan debt than any other president. By utilizing existing programs, the administration has made it easier for specific groups of borrowers, like public-sector workers, disabled individuals, and those defrauded by for-profit colleges, to qualify for debt forgiveness. To date, over 4 million people have had their federal student debt canceled under President Biden, totaling $146 billion. The administration’s focus on providing relief to borrowers through various programs showcases their commitment to addressing the student loan debt crisis in the country.
