New Student Loan Relief Plan Offers Forgiveness and Discharge Options

negotiated rulemaking processThe provisions of the plan include forgiving excessive interest that has accrued, discharging balances that have been in repayment for 20 years or more and relief for borrowers who attended now-closed or insolvent institutions.

Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly"People who are upside down on their student loans because interest has racked up faster than they could pay it, people who have been making payments on their loans for decades and still owe those loans — it's a sign of how aggressive the President is in tackling the student loan crisis," he said.

As with Biden's previous student debt forgiveness proposals, it's possible this plan will come under legal scrutiny if challenged by opponents. But this plan differs from his previous action by using a different legal authority — the Higher Education Act — and narrowing the scope of borrowers eligible for relief.In the event this plan is enacted and a future presidential administration wanted to repeal it, it would need to go through the same lengthy rulemaking process, Kvaal said.

Biden's plan aims to address that"runaway interest" by canceling up to $20,000 of the amount a borrower's balance has grown due to unpaid interest after entering repayment. Single borrowers who earn $120,000 or less and married borrowers earning $240,000 or less who enroll in an income-driven repayment plan would be eligible to have their entire excess interest balances discharged, the administration said.

Source: Education Headlines (educationheadlines.net)

Student Loan Relief Plan Forgiveness Discharge Interest Repayment Insolvent Institutions Struggling Borrowers

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