President Joe Biden is set to announce a new student loan forgiveness plan that could potentially benefit tens of millions of Americans. This plan comes after the Supreme Court rejected his initial attempt to cancel student debt last year. The revised plan aims to erase or lower the balances of borrowers who meet specific criteria.
Biden’s Revised Plan
Under President Biden’s new plan, specific borrowers will be targeted for debt cancellation. These borrowers include those who are already eligible for debt forgiveness under an existing government program but have not applied, individuals who have been in repayment for 20 years or longer on their undergraduate loans, attendees of schools with questionable value, and those experiencing financial hardship. The plan also aims to cancel runaway interest for millions of borrowers, addressing the long-standing issue of high interest rates on federal student loans.
The Biden administration believes that its updated plan will survive legal challenges this time due to the use of a different law as its legal basis. While Biden’s initial attempt was based on the Heroes Act of 2003, the current plan relies on the Higher Education Act from 1965. This law grants the education secretary the authority to waive or release borrowers’ education debt, providing a more solid legal foundation for the forgiveness program.
In contrast to the previous attempt to cancel student debt through executive action, the Biden administration is now turning to the rulemaking process to deliver relief to borrowers. This approach is likely aimed at starting the forgiveness process before the upcoming elections in November, as a significant portion of voters consider student loan debt cancellation an important issue in the political landscape. By improving current loan relief programs, the administration has already cleared the education debts of 4 million people, totaling $146 billion in aid.
Public Perception and Impact
Forgiving student debt could potentially have a significant impact on young voters, as evidenced by a recent poll indicating that 70% of Gen Z respondents consider student debt cancellation important in the upcoming elections. With more than 30 million borrowers estimated to benefit from Biden’s new plan, it is clear that student loan forgiveness remains a key issue for many Americans.
Overall, President Biden’s new student loan forgiveness plan represents a significant step towards addressing the burden of student debt on millions of borrowers. By targeting specific groups and using a different legal justification, the administration aims to provide much-needed relief to those in financial hardship. The impact of this plan, alongside ongoing debt forgiveness efforts, is expected to have far-reaching effects on the lives of millions of Americans struggling with student loans.