Biden to Announce New Student Loan Forgiveness Plan Benefiting Millions

Biden Unveils New Student Loan Forgiveness Plan

President Joe Biden is set to reveal a new and extensive student loan forgiveness initiative on Monday, which could potentially benefit tens of millions of Americans.

New Announcements and Legal History

Biden will disclose the details of this aid package at an event in Madison, Wisconsin, less than a year after the Supreme Court rejected his initial attempt to annul up to $20,000 in student debt per borrower, ruling it unconstitutional in June.

Scope of the New Plan

The revised strategy aims to target specific borrowers, including those who are already eligible for debt cancellation under an existing government program but haven't applied, individuals who have been in repayment for 20 years or longer on their undergraduate loans, or over 25 years on their graduate loans, attendees of schools of questionable value, and those facing financial hardship.

Definition of Financial Hardship

While the exact definition of financial hardship is yet to be fully clarified, it could potentially include individuals burdened by medical debt or high child care expenses, according to the Biden administration.

Interest Cancellation and Legal Justifications

President Biden is also expected to address the cancelation of interest for millions of borrowers. The plan estimates that borrowers could have up to $20,000 of unpaid interest forgiven, with certain low- and middle-income borrowers potentially having the entire amount of accrued interest canceled since entering repayment.

The administration believes that this updated plan will withstand legal challenges due to its targeted nature and the use of the Higher Education Act as its legal basis, in contrast to Biden’s previous attempt, which was based on the Heroes Act of 2003.

The Rulemaking Process and Political Implications

Moreover, the Biden administration has shifted to the rulemaking process to deliver this relief, as opposed to attempting debt cancellation through executive action. This move is likely influenced by a desire to initiate student debt forgiveness before voters go to the polls in November.

According to a recent survey by SocialSphere, almost half of voters, particularly Gen Z respondents, consider canceling student loan debt an important issue in the upcoming presidential and congressional elections. Forgiving student debt could be especially influential for Biden in gaining support from young voters.

Impact and Ongoing Efforts

This new plan is expected to reach over 30 million borrowers, in addition to the ongoing debt forgiveness efforts of the Biden administration. The administration has already provided relief to 4 million individuals, totaling $146 billion in aid, by enhancing existing loan forgiveness programs.

This is a developing story. Please stay tuned for further updates.