President Joe Biden is unveiling a new mass student loan forgiveness plan during a speech in Wisconsin. This initiative has been in development for nearly a year, following the Supreme Court’s rejection of his original debt relief proposal. The Department of Education has been working on regulations for the new program, which officials believe will be more legally sound.
Unlike Biden’s previous plan, the new student loan forgiveness program will target specific groups of borrowers in need of relief. These include those with loans from over 20 or 25 years ago, individuals facing substantial balance growth due to accrued interest, former students of predatory schools, borrowers eligible for existing forgiveness programs but did not apply, and those experiencing financial hardship. The plan could potentially cancel a borrower’s full balance in certain cases and aims to provide relief automatically for over 20 million borrowers.
Biden’s new student loan forgiveness plan stands separately from other debt relief initiatives implemented by his administration. These include fixes to the Public Service Loan Forgiveness program, improvements to income-driven repayment plans, changes to the Total and Permanent Disability discharge program, and debt relief for students impacted by school practices. Collectively, the administration has approved more than $143 billion in student loan forgiveness for over 4 million borrowers.
The Education Department is finalizing regulations for the new initiative, with a public comment period expected to follow in the coming weeks. While the plan could launch by fall, there is a possibility of legal challenges that may delay or obstruct the program. Officials are confident in the program’s legal foundation under the Higher Education Act, which authorizes loan forgiveness in specific circumstances. However, the outcome will depend on how the courts interpret the new plan’s legality.
Overall, Biden’s new student loan forgiveness plan aims to provide relief to borrowers who have been struggling with their student debt for an extended period. By targeting specific groups of individuals facing financial challenges due to their loans, the initiative seeks to alleviate the burden on millions of borrowers. While there are still procedural steps to finalizing the program, the administration is hopeful that the new plan will be able to provide the necessary relief to those in need.
