President Joe Biden will unveil his new plan to give student loan relief to many new borrowers
WASHINGTON (AP) — President Joe Biden will announce his latest effort to broaden student loan relief next week for new categories of borrowers, according to three people familiar with the plans, nearly a year after the Supreme Court foiled his administration’s first attempt to cancel debt for millions who attended college.
Biden will detail the plan Monday in Madison, Wis., where the flagship campus of the University of Wisconsin is located. The actual federal regulations — outlining who would qualify to get their student loan debt reduced or eliminated — are not expected to be released then, said the people, who were granted anonymity to detail a proposal not yet made public.
Much of the specifics that Biden will discuss Monday have long been telegraphed through a negotiated rulemaking process at the Department of Education, which has worked for months to hash out the new categories of borrowers. The president announced immediately after the Supreme Court decision that Education Secretary Miguel Cardona would undertake the process because he would have the power, under the Higher Education Act, to waive or compromise student loan debt in specific cases.
Still, the effort seeks to make good on Biden’s promise after the Supreme Court struck down his initial plan in June, a $400 billion proposal to cancel or reduce federal student loan debt that a majority of justices insisted needed congressional approval. Biden called that decision a “mistake” and “wrong.”
And the fresh announcement on student loan relief, a vital issue for younger voters, could help energize parts of Biden’s political coalition who have become disillusioned over his job performance — people whose support the president will need to defeat presumptive Republican presidential candidate Donald Trump this year.
The plan that Biden will detail would expand federal student loan relief to new yet targeted categories of borrowers through the Higher Education Act, which administration officials believe puts it on a stronger legal footing than the sweeping proposal that was killed by a 6-3 court majority last year. The planned announcement from Biden was first reported by the Wall Street Journal.
One of the categories of people who are expected to qualify under the new proposal is those with financial hardship, the people said. Another category is likely to include borrowers whose student loan balances have ballooned significantly because of accrued interest and they now owe more than they initially borrowed. Another potential category would relieve debt for borrowers who attended college programs that are considered “low-value.”
“This new path is legally sound,” Biden said then. “It’s going to take longer, but, in my view, it’s the best path that remains to providing for as many borrowers as possible with debt relief.”
Since that initial decision, the Biden administration has worked to ease student loan debt for much narrower groups of borrowers, including public service workers.
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