Biden-Harris Administration Moves Closer to Providing More Debt Relief for Student Loan Borrowers in the Fall

The Biden-Harris Administration has announced the initiation of the next phase in providing student debt relief to millions of borrowers this Fall. Commencing tomorrow, the U.S. Department of Education will start sending emails to all borrowers with at least one outstanding federally held student loan to update them on potential relief and inform them they have until August 30 to opt out if desired. The finalized rules for this relief are pending, and the emails do not guarantee eligibility. More information will follow once the rules are established this autumn. These proposed rules expand on the Administration’s prior actions, which have granted over $168 billion in relief to nearly 4.8 million borrowers. If finalized, these rules would extend relief eligibility to over 30 million borrowers, including those previously approved for debt cancellation by the Biden-Harris Administration.

U.S. Secretary of Education Miguel Cardona remarked, “The Biden-Harris administration continues its commitment to providing student debt relief to borrowers affected by a flawed system. These latest measures demonstrate our ongoing efforts to assist millions of borrowers burdened by student loan interest and financial hardships due to college programs. As we progress towards the conclusion of a comprehensive rulemaking process, we are one step closer to fulfilling our promise of delivering relief.”

In April, the Administration unveiled initial draft rules proposing to authorize the Secretary of Education to grant debt relief to millions of borrowers nationwide, including those with escalating balances from accrued interest and long-standing repayment obligations. Should the proposed rules be finalized, the Department would be able to offer partial or full debt relief to various groups of borrowers.

· Borrowers whose current loan balance exceeds the balance at the start of repayment due to accruing interest may be eligible. Approximately 23 million borrowers, predominantly Pell Grant recipients, could benefit from this relief.
· Borrowers with undergraduate loans in repayment for over 20 years or graduate loans in repayment for over 25 years may qualify for relief.
· Borrowers who are eligible for loan forgiveness but have not applied, along with those enrolled in low-value programs, could also receive relief.

If the proposed rules are enacted, eligible borrowers burdened by student loan debt would automatically receive relief without the need for additional paperwork.

To opt out of the debt relief program by August 30, 2024, borrowers must contact their servicer. Once opted out, rejoining the program will not be possible, and forgiveness through an IDR plan will be temporarily paused until eligibility is reassessed by the Department. It is crucial for borrowers to have entered repayment by the time eligibility is determined based on the finalized rules.

For further information on debt relief, visit StudentAid.gov/debt-relief.

The Biden-Harris Administration has implemented significant measures to alleviate student debt burdens, including increasing the maximum Pell Grant by $900, finalizing rules to safeguard borrowers from unsustainable career programs, and ongoing actions to issue debt relief regulations under the Higher Education Act.

The Administration has approved the following debt relief initiatives:

· $69.2 billion aiding 946,000 borrowers through fixes to the Public Service Loan Forgiveness (PSLF) program.
· $51 billion benefiting more than 1 million borrowers via administrative adjustments to IDR payment counts, addressing misuse of forbearance by loan servicers.
· $28.7 billion allocated to over 1.6 million borrowers affected by school closures or misconduct.
· $14.1 billion assisting 548,000 borrowers with total and permanent disabilities.
· $5.5 billion directed towards 414,000 borrowers through the SAVE Plan.