Biden unveils plan to provide debt relief for student loan borrowers at risk of default

The Biden administration has put forth a bold proposal to determine the eligibility of low-income Americans for student debt relief.

According to the plan released by the Education Department on Thursday, the federal government would take into account the challenges faced by certain borrowers that hinder their loan repayment progress when determining eligibility for student loan forgiveness.

The agency’s decision-making process would place greater emphasis on factors such as disability status or high-cost burdens for essential expenses like healthcare or caregiving. Additionally, household income, assets, and age would also be considered.

The Department of Education estimates that the proposed regulation could automatically provide relief to borrowers who are highly likely to default within two years, potentially granting forgiveness to hundreds of thousands of these borrowers. Advocates believe that the proposal could ultimately pave the way for relief to tens of millions of borrowers, although the exact number is not yet known.

During a press call on Thursday, White House press secretary Karine Jean-Pierre emphasized that this announcement reflects President Joe Biden’s continued commitment to pursuing widespread student loan forgiveness, despite the setback his previous comprehensive plan faced due to conservative opposition on the Supreme Court.

“He promised he wasn’t done fighting for student loan borrowers,” Jean-Pierre stated.

This announcement comes after months of pressure from progressive groups, urging the Education Department to take more ambitious actions in providing student loan relief, despite the legal obstacles. Student loan relief advocates have praised the administration for heeding their calls.

“Upon enacting this proposal, federal policy will finally acknowledge what Americans from all walks of life have known for decades – higher education often fails to deliver on its promise of economic mobility and financial stability. Borrowers and their families should not endure a lifetime of debt as a consequence,” commented Persis Yu, deputy executive director at the Student Borrower Protection Center.

Progressive lawmakers, including Senator Elizabeth Warren of Massachusetts, have also applauded the White House’s announcement.

“This is a significant next step in the fight to cancel student debt for many more Americans. Borrowers who struggle to cover their expenses deserve relief from our broken student debt system, and we should make accessing that relief as easy as possible,” Warren stated.

However, Representative Virginia Foxx of North Carolina, who chairs the House education committee and has been a vocal critic of Biden’s student loan policies, criticized Thursday’s announcement.

“Student debt is skyrocketing, college completion rates are abysmal, and schools have zero accountability for the exorbitant fees they charge,” she said in a statement. “Voters don’t want to be bribed.”

Education Department officials will discuss the new plan with federal negotiators during the final session of the student loan relief talks, scheduled for next week. The session will specifically address relief for borrowers facing financial hardship.