On Monday, the Biden administration unveiled its new student loan debt proposal, which, if finalized, would eliminate some debt for as many as 25 million borrowers.
These plans primarily target those with "runaway interest" and borrowers who have been making payments for two decades. Moreover, it aims to assist those eligible for forgiveness through income-driven repayment (IDR) schemes and individuals enduring financial hardship.
"The plans would give borrowers $20,000 in loan forgiveness for balances that have grown due to unpaid interest since entering repayment, regardless of income. Those who qualify for the SAVE IDR plan would get the full balance of their unpaid interest forgiven," explains The Hill. "This would result in 25 million Americans getting relief from balance growth that was garnered by unpaid interest, with 23 million seeing their full balance growth canceled."
The administration is also aiming for automatic debt relief for those who qualify under the SAVE plan, Public Service Loan Forgiveness program and other loan forgiveness programs but have hit red tape in receiving their relief. It is estimated 2 million Americans would get full loan forgiveness through this option.
Lastly, the administration wants to give relief to those who were enrolled in low-financial-value education programs that have been deemed insufficient by the Department of Education, and borrowers who are experiencing hardship in paying back loans, such as those at high risk of defaulting on loans and families burdened with other debt, such as medical debt.
According to the White House, the Biden-Harris administration has already approved $146 billion in student debt relief for 4 million Americans "through more than two dozen executive actions."
Biden first attempted student loan debt forgiveness via executive pen in 2022 before the midterm elections. However, the Supreme Court rightfully blocked it. Since then, the administration has sought any possible workaround to defy the court. Biden has even bragged about defying the Supreme Court.
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"Early in my term, I announced a major plan to provide millions of working families with debt relief for their college student debt," Biden said back in February. "Tens of millions of people in debt were literally about to be canceled in debts. But my MAGA Republican friends in the Congress, elected officials and special interests stepped in and sued us. And the Supreme Court blocked it. But that didn’t stop me."
To get the maximum political benefit from this move, the Biden administration plans to release proposed rules for this new debt relief over the coming months. "If these plans are finalized as proposed, this fall the Administration would begin canceling up to $20,000 in interest for millions of borrowers and full loan forgiveness for millions more."
The White House sought to chide Republicans for opposing this mass debt relief, saying, "While Republican elected officials try every which way to block millions of their own constituents from receiving student debt cancellation, President Biden has vowed to use every tool available to cancel student debt for as many borrowers as possible, as quickly as possible."
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