(NewsNation) — President Joe Biden announced a new plan for student debt relief that would increase the number of borrowers eligible for relief to more than 30 million, following the defeat of an earlier plan.
The new plan uses the Higher Education Act to forgive student debt after the Supreme Court ruled a previous plan overstepped the president’s executive authority. Since the court ruling, the administration has used existing programs to chip away at student loan debt on a smaller scale.
The Biden-Harris administration proposes waivers that would cancel up to $20,000 of unpaid interest for borrowers who owe more than they originally borrowed due to accrued interest regardless of income.
Low and middle-income people enrolled in the administration’s SAVE plan or other income-driven repayment plan would be eligible for the entire amount their balance has grown since beginning repayment, including single borrowers who earn $120,000 or less or married couples earning $240,000 or less.
No application would be needed for forgiveness. The administration announced a plan to automatically discharge debt for borrowers otherwise eligible for loan forgiveness under other programs who have not enrolled.
The plan would also eliminate student debt for those who have been paying their loans for 20 years or more, including undergraduate and graduate debt.
Loan debt would also be forgiven for those who attended schools or programs that closed or which were denied eligibility for the Federal student aid program or denied recertification because of cheating or taking advantage of students.
The plan would also waive student debt for those whose financial hardship prevents them from paying off their loans. Some borrowers who are predicted to be likely to default on loans could automatically have them forgiven while others could apply with information about hardships like the cost of child care or medical expenses that keep them from making payments.
“These historic steps reflect President Biden’s determination that we cannot allow student debt to
leave students worse off than before they went to college,” said U.S. Under Secretary of
Education James Kvaal.
The administration’s previous effort to forgive student loans would have affected a wider range of borrowers, but it was struck down by the Supreme Court after a lawsuit from Republican governors of several states argued their states would be financially harmed by the plan.
Republicans have criticized student loan forgiveness efforts and attempted to block them, saying Biden overstepped his authority and that forgiveness is unfair to those without student loans.
