The Biden administration appears to be moving toward a narrower student loan relief plan, months after a Supreme Court ruling.
The Biden administration appeared to make major changes to its new student loan relief plan after the initial plan was struck down by the U.S. Supreme Court earlier this year.
On Monday, the Department of Education (DOE) released a draft text that showed that the narrower plan would allow student debt forgiveness to apply only to specific groups of students rather than being a blanket rule that would cancel debt for some 45 million borrowers under the original plan.
The first student loan proposal, announced by President Joe Biden, would have promised up to $20,000 in debt relief for low- and middle-income individuals. The Supreme Court struck that down in June.
“President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” Secretary of Education Miguel Cardona said in a statement about the proposal. “These draft proposals would build on the historic $127 billion in loan forgiveness the Biden-Harris Administration has already approved for nearly 3.6 million borrowers. We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education.”
However, the DOE has yet to release the full details of the plan, saying that it wants to cancel some or all student debt for borrowers whose balances exceed what they originally owed; those who have loans that entered repayment 25 or more years ago; those who used loans to attend career-training programs that led to “unreasonable” debt loads or insufficient earnings; or those who are eligible for other loan forgiveness programs but did not apply.
A fifth group is also being discussed, or “those who are experiencing financial hardship that the current student loan system does not currently adequately address,” the DOE said.
The draft does not include details about how many borrowers would be impacted by the federal government’s latest plan. It also did not include details about how much it may cost.
