President Joe Biden, yesterday, laid out his new plans to forgive some or all student loans for more than 30 million Americans, trying to expand on his administration’s work to reduce debt burdens but offering a narrower path for forgiveness than a plan struck down by the Supreme Court last year.
The proposed plans would largely affect those with “runaway interest,” as well as borrowers who have been paying on loans for 20 years, qualify for forgiveness under income-driven repayment (IDR) plans and those experiencing hardship.
The plans would give borrowers $20,000 in loan forgiveness for balances that have grown due to unpaid interest since entering repayment, regardless of income. Those who qualify for the SAVE IDR plan would get the full balance of their unpaid interest forgiven.
Since taking office, the administration has provided $146 billion in loan forgiveness for 4 million public servants, defrauded students, disabled borrowers and other groups already entitled to cancellation by adjusting existing relief programs.
But Biden has faced regular attacks on his debt cancellation policies from conservatives, including a lawsuit filed last week by nearly a dozen state attorneys generals to scuttle the president’s new student loan repayment plan. Critics have challenged Biden’s authority to wipe away debt and denounced his loan cancellation efforts as fiscally irresponsible and unnecessary.