The Biden administration recently unveiled a draft text of its proposed student loan forgiveness plan, aiming to alleviate the financial burden on millions of borrowers. The official rules are set to be published in the Federal Register, followed by a 30-day comment period. U.S. Secretary of Education Miguel Cardona expressed the administration’s commitment to revamping the higher education system through this initiative.
Biden’s Commitment to Fixing Student Debt Crisis
President Joe Biden’s latest student loan forgiveness proposal, known as Plan B, comes on the heels of a previous unsuccessful attempt following a Supreme Court ruling. The administration plans to implement the new rules and commence debt relief operations in the fall, once public feedback has been reviewed. Biden emphasized that the relief plan targets specific groups of borrowers in need, such as those with outstanding debt under existing programs, long-term repayment histories, or who attended questionable institutions.
Key Features of the Relief Plan
Under the proposed plan, eligible borrowers could receive up to $20,000 in forgiveness for unpaid interest on federal student loans, irrespective of their income levels. While the draft text aligns with the initial announcement, it excludes borrowers facing financial hardships at this stage. The Education Department intends to provide further updates on this aspect in due course.