The Biden administration has now doled out $153 billion in student debt relief for 4.3 million people, per Axios.
The administration has already provided $153 billion in student debt relief to 4.3 million individuals through various initiatives. If approved, the new plan aims to increase assistance to over 30 million borrowers.
U.S. Secretary of Education Miguel Cardona emphasized that the administration is committed to fixing the flaws in the higher education system. He stated, "Student loan forgiveness isn't just about helping current borrowers—it's about promoting social mobility, fostering economic prosperity, and realizing the highest ideals of America."
Unlike Biden's previous plan, which was based on the COVID-era HEROES Act and was rejected by the courts, the new proposal relies on the legal authority of the Secretary of Education under the Higher Education Act.
The new plan includes provisions to cancel up to $20,000 of accrued interest for borrowers, regardless of their income. Additionally, individuals with incomes below $120,000 or couples earning less than $240,000 who are enrolled in an income-driven repayment plan could have all of their interest forgiven. No application will be necessary to receive this relief.
The draft also addresses obstacles faced by some borrowers who are eligible for existing forgiveness programs but have been unable to successfully apply due to paperwork requirements or other issues. Furthermore, it aims to assist approximately 2.6 million borrowers who still have outstanding debt from loans that entered repayment at least twenty years ago.
The administration is currently engaged in a "negotiated rulemaking" process, during which the draft rules will undergo a 30-day comment period starting Wednesday. The Department of Education will consider these comments and aims to finalize the rules in time to begin delivering relief in the fall.
Under Secretary of Education James Kvaal emphasized the importance of the proposed relief, stating, "There are 25 million borrowers whose interest is growing faster than they can pay it down. That fact alone shows how badly President Biden's student loan relief is needed."
