The Biden administration is poised to unveil a comprehensive new proposal for student loan forgiveness, which could have far-reaching implications for millions of Americans.
Sources familiar with the White House’s plans confirm that President Joe Biden is anticipated to outline the framework for a significant new student loan forgiveness plan during his trip to Wisconsin on Monday, as reported by ABC News.
President Biden is now introducing fresh plans almost a year following the Supreme Court’s obstruction of his administration’s initial endeavor to forgive debt for millions of college attendees.
On Monday, President Biden plans to journey to Madison, a key battleground state that is home to a major university.
The president is likely aiming to initiate debt forgiveness for numerous student borrowers prior to the November election. According to a recent survey, nearly half of all voters, accounting for 48%, consider canceling student loan debt to be a significant issue in the upcoming 2024 presidential and congressional elections.
Biden’s forthcoming plan is expected to broaden federal student loan relief to specific yet-to-be-identified groups of borrowers under the Higher Education Act. Administration officials believe this approach provides a more solid legal foundation compared to the broader proposal that was struck down by a 6-3 court majority last year. The Wall Street Journal first reported Biden’s planned announcement.
“This new path is legally sound,” Biden said in June. “It’s going to take longer, but, in my view, it’s the best path that remains to providing for as many borrowers as possible with debt relief.”
According to The Associated Press, “President Biden’s expected additional executive action will greatly reduce the burden of student loans for millions of Americans,” Senate Majority Leader Chuck Schumer, D-N.Y., said Friday. “There is always more work to be done to alleviate the burden of student loan debt. And we will not stop until crippling student loan debt is a thing of the past.”
The proposal aims to assist individuals whose unpaid interest has accumulated beyond the original loan amount. It would reset their balances to the initial amount by eliminating up to $10,000 or $20,000 in interest, depending on the borrower’s income.
Additionally, borrowers who have been repaying their student loans for many years would have all remaining debt forgiven under the Department’s plan. Specifically, loans used for undergraduate education would be forgiven after at least 20 years of repayment, while for other types of federal loans, the forgiveness period would be 25 years.
The newest undertaking for loan cancellation supplements other targeted initiatives, including those directed at public service workers and low-income borrowers.
