President Biden on Monday will unveil his second major attempt at large-scale student loan forgiveness with a new set of proposals the administration says could provide debt relief for more than 30 million Americans.
President Biden on Monday will unveil his second major attempt at large-scale student loan forgiveness with a new set of proposals the administration says could provide debt relief for more than 30 million Americans.
Mr. Biden will detail the proposal Monday afternoon at Madison College’s Truax campus in Wisconsin. It is much smaller in scope than his first debt relief plan, which the Supreme Court ultimately declared unconstitutional.
The smaller plan would cancel up to $20,000 in interest for more than 25 million borrowers whose unpaid interest has swelled beyond the size of the original loan. By erasing the interest, the proposal would reset the borrowers’ income back to the initial balance.
Borrowers paying down their student loans for decades would get all remaining debt erased under the new plan. Loans used for a borrowers’ undergraduate education would be canceled if they had been in repayment for at least 20 years.
The plan would also cancel loans for those who went to for-profit colleges the administration has deemed “low-value.”
Borrowers would be eligible for cancellation if, while they attended the program, the average student loan payment among graduates was too high compared to their average salary. It would also provide debt relief to students who attended for-profit universities that have since closed.
Under the plan, borrowers who experienced hardship in their daily lives, preventing them from fully paying back their loans now or in the future would also be eligible for student debt relief.
