The Biden administration has revealed details of a new plan to forgive student loan debt, potentially providing relief to millions of Americans starting this fall. This initiative marks President Joe Biden's second attempt at broad student loan forgiveness, following the Supreme Court's rejection of his initial plan last year.
The proposed policies, in conjunction with existing actions by the administration, could benefit over 30 million Americans, with nearly 70% of federal student loan borrowers seeing reductions or full cancellations of their debt.
The finalized plans, currently under development, may face legal challenges and a lengthy approval process. However, if approved, the new proposals target specific groups of borrowers, including those with ballooning balances due to interest, individuals eligible for existing forgiveness programs, long-term repayment cases, students from low-value programs, and those experiencing financial hardship.
The Department of Education is conducting a formal rulemaking process to establish the new forgiveness program, with potential implementation as early as this fall. While the final rule could take effect by July 2025, certain provisions may be enacted sooner.
Despite the Supreme Court's rejection of his sweeping forgiveness plan, President Biden's administration has already canceled $146 billion in student loan debt for 4 million individuals, surpassing previous administrations' efforts. By expanding eligibility criteria and streamlining processes, the administration aims to provide relief to a broader range of borrowers, including public-sector workers, disabled individuals, and victims of for-profit college fraud.
