President Biden Announces New Proposal for Student Loan Cancellation

President Joe Biden delivers remarks on student loan debt at Madison College, Monday, April 8, 2024, in Madison, Wis. WASHINGTON — President Joe Biden is taking another shot at student loan cancellation , hoping to deliver on a key campaign promise that he has so far failed to fulfill.

The new plan targets five categories of borrowers, focusing on those believed to be in the greatest need of help. It would provide relief to an estimated 30 million borrowers. The administration has not said how much the plan would cost.The widest-reaching provision aims to reset student loan balances for borrowers who have seen their debt grow because of unpaid interest. It would cancel up to $20,000 in interest for Americans who now owe more than they originally borrowed.

All debt would be canceled for borrowers who have been repaying undergraduate loans for 20 years or more, or 25 years for those with graduate school debt. The Biden administration says it would erase loans for more than 2 million people. Most of the cancellation would be done automatically with no need to apply. That would be the case for the interest cancellation, borrowers with older loans, those that attended low-value programs, and those eligible for other cancellation programs.

That timeline would require some maneuvering. The Education Department said it plans to release a formal proposal in the “coming months.” That would usually be followed by a public comment period of 60 days. Then if the rule is finalized by Nov. 1, it would usually take effect the following July — in this case, July 2025.

Republicans have repeatedly fought Biden’s plan for student loan cancellation, saying it’s an unfair benefit shouldered by taxpayers who repaid their loans or didn’t go to college. Opponents say the Supreme Court was clear that widespread loan cancellation must come from Congress.

Source: Education Headlines (educationheadlines.net)

President Joe Biden Student Loan Cancellation Campaign Promise Supreme Court Debt Relief Education Department

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