President
Joe Biden is set to unveil new plans aimed at canceling or reducing student loan balances for millions of Americans after the
Supreme Court struck down his large-scale debt forgiveness attempt last year. The
White House expects the latest proposal, when combined with previous actions taken by the administration, to benefit over 30 million Americans in total. The president is scheduled to announce his plans on Monday during his trip to Madison, Wisconsin. He will also meet with borrowers who have benefited from his debt relief efforts. “If these plans are finalized as proposed, altogether, this administration will begin to cancel up to $20,000 in interest for millions of borrowers and full loan forgiveness for millions more this fall,” Secretary of Education Miguel Cardona told reporters during a call. “That’s on top of the $146 billion in student loan debt relief for 4 million Americans that we’ve already approved,” he said. According to a fact sheet released by the White House, these plans aim to eliminate accrued interest for 23 million borrowers, cancel the entire student debt for over 4 million borrowers, and offer debt relief of at least $5,000 or more to more than 10 million borrowers. In June 2022, the Supreme Court decided 6-3 to overturn the Biden administration’s original loan forgiveness plan. That proposal aimed to cancel $430 billion in repayments related to student loan debt, which was expected to benefit up to 43 million Americans. “Republican-elected officials sued us, and the Supreme Court sided with them, leaving millions of people with the burden of student loan debt,” White House Press Secretary Karine Jean-Pierre told reporters during the call. “On the day of that decision, President Biden promised that he wouldn’t stop fighting to deliver debt relief,” she added. If implemented, the new plan would cancel runaway interest for millions of borrowers, as well as debt for borrowers who have been living with their student loans for 20 years or more for undergraduate loans and 25 years or more for graduate loans, according to the White House. It would also automatically cancel debt for borrowers who qualify for forgiveness programs such as Saving on a Valuable Education (SAVE), Public Service Loan Forgiveness (PSLF), and others. In addition, borrowers who are enrolled in low financial value programs and those who are experiencing difficulties in their everyday lives will also be able to benefit from the loan forgiveness policies in the Biden administration’s budget. The proposal will be released for public comment in the coming months, and the goal is to begin canceling interest balances for borrowers early this fall, before the
election, a senior administration official told reporters during the call. Despite potential legal challenges, administration officials believe they are on sound legal footing. “We have studied the Supreme Court’s decision carefully. We intend to pursue these regulations in a way that is entirely consistent with that decision,” a senior administration official told reporters during the call. The new proposal differs from the administration’s previous debt relief plan and will be implemented using the secretary’s long-standing authority under the Higher Education Act, the official added. “We’re not concerned about an inflationary effect,” the official also said, adding that student debt relief will lead to “economic growth and economic mobility.”