Biden's new debt relief plan being announced Mon 8 April 2024

Biden’s new plan being announced Mon 8 April:

"Biden’s new plan would expand federal student loan relief to new yet-targeted categories of borrowers through the Higher Education Act, which administration officials believe puts it on a stronger legal footing than the sweeping proposal that was killed by a 6-3 court majority last year.

The plan is expected to be smaller and more targeted than his original plan, which would have canceled up to $20,000 in loans for more than 40 million borrowers.

The department laid out five categories of borrowers who would be eligible to get some or all of their federal loans canceled. The plan is focused on helping those with the greatest need, including many who might otherwise never repay their loans.

Among those targeted for help are people whose unpaid interest has snowballed beyond the size of the original loan. The proposal would reset their balances back to the initial amount by erasing up to $10,000 or $20,000 in interest, depending on their income.

Borrowers paying down their student loans for decades would get all remaining debt erased under the plan. Loans used for a borrower’s undergraduate education would be canceled if they had been in repayment for at least 20 years. For other types of federal loans, it’s 25 years.

The plan would automatically cancel loans for those who were in for-profit college programs deemed “low-value.” Borrowers would be eligible for cancellation if, while they attended the college, the average federal student loan payment among graduates was too high in relation to their average salary.

Those who are eligible for other types of cancellation but haven’t applied would automatically get relief. It would apply to Public Service Loan Forgiveness and Borrower Defense to Repayment, programs that have been around for years but require infamously difficult paperwork.

Under pressure from advocates, the department also added a category for those facing “hardship.” It would offer cancellation to borrowers considered highly likely to be in default within two years. Additional borrowers would be eligible for relief under a wide-ranging definition of financial hardship.

A series of hearings to craft the rule wrapped up in February, and the draft is now under review. Before it can be finalized, the Education Department will need to issue a formal proposal and open it to a public comment period."

What are your thoughts?

Best Wm

PS There’s a public comment period… He is too afraid to just pull the trigger which means conservatives will file suit and nothing will move forward.

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Personally, I am very disappointed. Many people of color sometimes owe 50% to 100% more in interest charges than their original student loan.

Holly Johnson Friar
Elbow Room – The Movement to End Predatory Student Loan Debt


This is absolutely true. Also, there should not be an income test on interest loan cancellation. No one who could afford tuition at the time took out loans.


I agree with your concluding remark. This is another half-hearted effort designed to fail; another tepid, if not cowardly, proposal.

What we must insist on is getting the financial industry entirely out of higher education, and this includes the federal government that acts just as greedily.


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