Biden Announces New Mass Student Loan Relief Proposal For More Than 30 Million People

President Joe Biden has introduced an expansive new plan on Monday, targeting the alleviation or reduction of student loan debt for over 30 million individuals. This initiative marks the administration’s second attempt at providing widespread debt forgiveness, following the Supreme Court’s obstruction of its initial program last summer. Under this proposal, up to $20,000 in interest would be canceled for more than 25 million borrowers who owe more than their original loan amount, irrespective of their income levels.
The plan aims to streamline the debt relief process by automatically forgiving debts for eligible borrowers who haven’t applied for relief due to various obstacles, including paperwork requirements or misinformation. This includes individuals who have borrowed $12,000 or less and have been in repayment for a decade under the SAVE plan, as well as those enrolled in the Public Service Loan Forgiveness (PSLF) program who have completed ten years of service and made 120 months of payments. Additionally, other pathways for forgiveness, such as the closed school discharge plan, would be considered.
Moreover, the proposal extends debt cancellation to over 2.5 million borrowers who entered repayment more than 20 years ago, along with borrowers enrolled in low-financial-value programs and those facing hardship in making loan payments.
The administration intends to unveil the proposal through the federal rule-making process in the coming months, with potential implementation as early as the fall. However, legal challenges are anticipated, reflecting the contentious nature of student loan debt relief in the United States.