U.S. President Joe Biden gestures after speaking about student loan debt relief at Madison Area Technical College in Madison, Wisconsin, on April 8, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
The Biden administration unveiled a new delivery proposal on Friday student loan forgiveness to Americans who experience “financially devastating difficulties.”
Eligibility rules are unclear, but examples of hardship that could make a borrower eligible for assistance include potential economic ruin caused by natural disasteror massive, an unexpected medical bill.
Some borrowers could see loan relief automatically, while others would likely have to apply for it, an Education Department official told reporters on a call Thursday.
“Too long, ours the broken student loan system has made access more difficult for borrowers going through heartbreaking and financially devastating difficulties, and that’s not right,” Education Minister Miguel Cardona said Friday.
The announcement was the latest effort by the Department of Education under President Joe Biden to eliminate the education debt.
Biden has forgiven more student debt than any other president in history. But his most ambitious plans have so far been blocked by legal challenges led by Republicans.
Under this latest proposed rule, which is almost certain to face more of the same lawsuits, nearly 8 million struggling student loan borrowers could qualify for relief.
Loan cancellations could reach borrowers “with ongoing financial burdens that prevent them from repaying their student loans” and who are not fully helped by the department’s existing assistance options, the official said.
The proposed regulations could be published in the Federal Register within weeks. The Biden administration hopes to finalize this policy in 2025.
However, the department’s previous attempts to provide student loan forgiveness on a broad scale are currently blocked by the courts after a wave of legal challenges led by the GOP.
The outcome of the presidential election in November is also likely to play a role in the fate of these relief efforts.
Former President Donald Trump is a vocal critic of the policy of reducing or eliminating student loan balances. Democratic Party Vice President Kamala Harris supports the measures.