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President Joe Biden is slated to travel to Madison, Wisconsin, on Monday to announce a new student loan relief plan that could benefit over 30 million borrowers.
The plan would cancel debt for borrowers experiencing economic hardship that hinders them from making loan payments and those who qualify but have not enrolled in existing forgiveness programs for public servants, lower- and middle-income individuals, and other groups. It would also aim forgiveness, in some cases up to $20,000, at people who now have higher loan balances than when they began repayment because of accrued interest.
Borrowers who enrolled in colleges that cheated students, closed, became ineligible to take part in the Federal Student Aid Program or otherwise left them with “low-value credentials” could also see their debt canceled. So could borrowers who entered repayment 20 to 25 years ago, depending on whether they have undergraduate or graduate loans.
This is the largest-scale forgiveness plan that Biden has proposed since 2022 when he announced that he would forgive up to $20,000 in student debt for borrowers earning under $125,000 annually — which stood to benefit more than 40 million Americans. The Supreme Court blocked that debt forgiveness effort in June.
Since then, the Department of Education has searched for ways to offer debt relief via the Higher Education Act’s rulemaking process. If this latest proposal is finalized, it would erase accrued interest for 23 million borrowers and the outstanding balances of over 4 million borrowers. The plan would also relieve at least $5,000 in debt for more than 10 million borrowers.
White House officials said Sunday during a call with reporters that this proposal would go out for public comment in the coming months and that the goal is to start delivering relief by early fall. They did not specify, however, if the process would be finalized before Election Day on November 5 or what would happen if the proposal faces a legal challenge.
“If these plans are finalized as proposed, altogether, this administration will begin to cancel up to $20,000 in interest for millions of borrowers and full loan forgiveness for millions more this fall,” Secretary of Education Miguel Cardona said on Sunday’s call. “We’re delivering as much relief as possible for as many borrowers as possible, as quickly as possible. And what does that really mean for people? It means breathing room. It means freedom from feeling like your student loan bills compete with basic needs, like grocery or health care.”
Women hold two-thirds of student loan debt, and Black women have the highest outstanding student loan balances.
As the president travels to Madison, home of the University of Wisconsin’s flagship campus, Cardona, Vice President Kamala Harris and Second Gentleman Doug Emhoff will travel to New York City, Philadelphia and Phoenix, respectively, to promote the plan and meet with borrowers who have benefited from the administration’s actions to offset student debt.
Four million Americans have had over $146 billion in student debt approved for cancellation during the Biden-Harris administration. These borrowers include teachers, nurses and social workers enrolled in the Public Service Loan Forgiveness program and those enrolled in the Saving on a Valuable Education plan, which the White House has billed as the most affordable repayment plan to date because it prevents loan balances from ballooning due to unpaid interest and slashes undergraduate loan payments by half.
“Student loan forgiveness isn’t only about relief for today’s borrowers,” Cardona said. “It’s about social mobility, economic prosperity and creating an America that lives up to its highest ideals.”
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