U.S. President Joe Biden gestures after speaking about student loan debt relief at Madison Regional Technical College on April 8, 2024 in Madison, Wisconsin.
Andrew Caballero-Reynolds | AFP | Getty Images
The Biden administration announced a new proposal Friday that would provide student loan forgiveness to Americans experiencing “catastrophic economic hardship.”
Eligibility rules are vague, but examples of hardships that could make a borrower eligible for assistance include potential financial devastation caused by natural disasters or large unexpected medical bills.
Education Department officials told reporters during a conference call Thursday that some borrowers will automatically receive loan relief, while others will likely have to apply.
“For too long, our nation’s broken student loan system has made it extremely difficult for borrowers facing heartbreaking and economically devastating hardship to receive relief,” Education Secretary Miguel Cardona said in a statement Friday. “It’s becoming increasingly difficult, and that’s not right.”
The announcement was the latest effort by the Education Department under President Joe Biden to cancel people’s education debt.
Biden is the president who has forgiven more student loans than any other president in history. But his most ambitious plans have so far been blocked by Republican-led legal challenges.
Under this latest proposed rule, approximately 8 million student loan borrowers facing severe hardship could be eligible for relief, as they are almost certain to face more similar lawsuits. be.
The official said the loan cancellations could impact borrowers who “have persistent financial burdens that prevent them from repaying their student loans” and for whom the department’s existing support measures are not sufficient. said.
The proposed regulations could be published in the Federal Register within weeks. The Biden administration hopes to complete the policy in 2025.
But the department’s previous attempts to provide large-scale student loan forgiveness have now been blocked by courts after a series of Republican-led legal challenges.
The outcome of November’s presidential election is also likely to have an impact on the outcome of these relief efforts.
Former President Donald Trump has been a vocal critic of policies that reduce or eliminate balances for student loan holders. Democratic Vice President Kamala Harris supports the measure.
