Biden Administration Proposes New Student Debt Relief Plan

President Joe Biden’s administration announced new student loan plans that could provide aid to millions of Americans.

The plans would affect those with “runaway interest,” as well as borrowers who have been paying loans for 20 years, qualify for forgiveness under income-driven repayment (IDR) plans and those experiencing economic troubles.

They would give borrowers $20,000 in loan forgiveness for balances that have increased due to unpaid interest since entering repayment, regardless of interest. Those eligible for the SAVE IDR plan would get the full balance of their unpaid interest forgiven.

Biden’s plans would result in 25 million Americans receiving support, with 23 million seeing their full balance growth canceled.

The administration is also proposing automatic debt relief for those who qualify under the SAVE plan, Public Service Loan Forgiveness program and other loan forgiveness programs but have faced challenges in receiving their relief. It is estimated that two million Americans would get full forgiveness through this plan.

Relief would also be given to those enrolled in low-financial-value education programs that the Department of Education has declared insufficient and to borrowers who are experiencing trouble paying back loans.

“The Biden-Harris Administration plans to release proposed rules on these plans over the coming months. If these plans are finalized as proposed, this fall the Administration would begin canceling up to $20,000 in interest for millions of borrowers and full loan forgiveness for millions more,” the administration announced.

“These actions are expected to provide significant relief to black and Latino borrowers, borrowers who attended community college, and borrowers who are financially vulnerable because they took out debt but never had the chance to complete their degree,” the administration continued.

The plans will take months to finalize, and will undoubtedly be challenged in court if approved.

Article by Ava Lombardi