President Joe Biden is gearing up to unveil a new student loan forgiveness plan next week, despite facing legal challenges in the past. Since 2021, the Biden administration has already approved over $143 billion in student loan forgiveness through various initiatives. These efforts have included improving existing loan forgiveness programs to provide relief to millions of borrowers. Biden is expected to announce the new plan in a speech next week, which will target specific groups of borrowers facing financial hardship.
Biden’s previous debt relief plan was struck down by the Supreme Court last year, which would have eliminated up to $20,000 in federal student loans for millions of borrowers. However, the administration has still been able to implement significant relief by streamlining and reforming existing loan forgiveness programs. This includes over $45.6 billion in forgiveness through the IDR Account Adjustment initiative, $62.5 billion for Public Service Loan Forgiveness, and $22.5 billion for borrowers impacted by school misconduct. Additionally, nearly $12 billion was discharged for borrowers with disabling medical conditions.
The new student loan forgiveness plan, set to be announced by Biden next week, will provide targeted relief to specific groups of borrowers. This includes those experiencing negative amortization, borrowers with loans for more than two decades, and individuals facing financial hardship. The Education Department has completed key steps in the regulatory process for the new program, with a rulemaking committee reaching consensus on core elements of the plan. The plan will undergo one more round of public comments before becoming finalized, with expectations that it could be available to borrowers by the summer or fall.
Legal challenges are expected for Biden’s next student loan forgiveness plan, as his previous program faced litigation that ultimately led to its demise. The new plan will be established under a different legal authority, but challengers are likely to argue the scope of this authority. A coalition of Republican-led states has already filed a lawsuit seeking to block the new SAVE plan, but no ruling has been made at this time. Biden’s administration is hopeful that the new forgiveness effort will have a better chance of success, given the specific legal authorization for the Education Department to cancel student debt.
Overall, the Biden administration has been able to enact significant student loan forgiveness through various initiatives and improvements to existing programs. The upcoming plan will target specific groups of borrowers facing financial hardship and is expected to provide relief in the coming months. While legal challenges are anticipated, Biden’s administration is determined to provide much-needed relief to millions of borrowers burdened by student loan debt. The success of this new plan will depend on its ability to navigate legal challenges and ultimately provide meaningful relief to those in need.
