Biden Administration’s Student Debt Forgiveness Plan Gets an Update.
OAN’s Brooke Mallory
11:52 AM – Tuesday, October 31, 2023
Following the Supreme Court’s June decision to overturn President Joe Biden’s expansive debt relief proposal for the pandemic era, the Biden administration is now reportedly proposing a new plan to cancel student loans.
A proposal for student debt relief was unveiled by the Education Department on Monday.
It would target four groups of borrowers:
- Those with federal student loans that have balances greater than the original amount borrowed
- Those whose loans were repaid more than 25 years ago
- Those whose loans were for career training programs that resulted in “unreasonable debt loads or provided insufficient earnings”
- Those who are eligible for forgiveness under other repayment plans but have not applied for it
A fifth group of borrowers, those “experiencing financial hardship that the current student loan system does not currently adequately address,” were also being considered in the plans. However, this group of borrowers does not hold a guaranteed spot currently.
“President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” said Education Secretary Miguel Cardona in a statement, including that the aid would build upon $127 billion in loan forgiveness that the Biden administration approved for about 3.6 million borrowers.
“We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education,” he included.
This month, the White House declared that an extra $9 billion in aid will be provided to around 125,000 Americans.
After the Supreme Court rejected Biden’s expansive pandemic-era debt relief proposal in June, federal student loan payments started up again for the first time in more than three years.
An estimated 43 million borrowers were scheduled to have their college debt forgiven up to $20,000 under the president’s prior plan for student debt relief. Following the Supreme Court’s invalidation of the original plan, Biden announced additional choices for debt repayment.
He claimed that borrowers would be able to participate in a 12-month “onramp repayment program” in order to reduce their chance of default once loan installments started in October. According to Biden, if a student has missed payments during that 12-month period, the Education Department will not report them to credit bureaus.
Furthermore, the current president declared that he would reduce the monthly ceiling on discretionary money allocated to student loans for undergraduate studies from 10% to 5%.
In his first proposal, Biden claimed that he would reduce debt through a 2003 statute known as the Higher Education Relief Opportunities for Students Act, or HEROES Act. According to this statute, in order to lessen the financial burden caused by a national emergency, the government may grant relief for student debts.
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How has the Biden administration adjusted its approach to student debt relief following the Supreme Court’s rejection of its previous proposal
The Biden administration is reportedly proposing a new plan to cancel student loans following the Supreme Court’s decision to overturn President Joe Biden’s extensive debt relief proposal for the pandemic era. The proposal for student debt relief was unveiled by the Education Department on Monday and aims to target four groups of borrowers.
The first group includes those with federal student loans that have balances greater than the original amount borrowed. The second group consists of borrowers who have repaid their loans more than 25 years ago. The third group comprises borrowers whose loans were for career training programs that resulted in “unreasonable debt loads or provided insufficient earnings.” The fourth group includes borrowers who are eligible for forgiveness under other repayment plans but have not applied for it.
A fifth group of borrowers, those experiencing financial hardship that the current student loan system does not adequately address, is also being considered in the plans. However, this group does not currently have a guaranteed spot.
Education Secretary Miguel Cardona stated that President Biden and himself are committed to helping borrowers who have been failed by the country’s broken and unaffordable student loan system. He mentioned that the proposed aid would build upon the $127 billion in loan forgiveness that the Biden administration had already approved for about 3.6 million borrowers. Cardona added that they are fighting to ensure that student debt does not hinder opportunity or prevent borrowers from realizing the benefits of their higher education.
In addition, the White House announced that an extra $9 billion in aid will be provided to around 125,000 Americans this month. Since the Supreme Court rejected Biden’s previous debt relief proposal, federal student loan payments have resumed for the first time in over three years.
Under Biden’s prior plan, an estimated 43 million borrowers were scheduled to have their college debt forgiven up to $20,000. However, following the Supreme Court’s invalidation of the original plan, Biden introduced additional choices for debt repayment. He announced a 12-month “onramp repayment program” to help borrowers reduce their chance of default once loan installments started in October. During this period, missed payments would not be reported to credit bureaus by the Education Department.
Furthermore, Biden reduced the monthly ceiling on discretionary money allocated to student loans for undergraduate studies from 10% to 5%.
Biden initially aimed to reduce student debt through the Higher Education Relief Opportunities for Students Act, also known as the HEROES Act. This statute allows the government to grant relief for student debts in response to a national emergency.
It is important to stay informed about these developments in student debt relief. You can receive breaking news blasts directly to your inbox for free by subscribing at https://www.oann.com/alerts.
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