Tuesday, 24 December 2024

Biden Administration Makes Decision On Student Loan Forgiveness Plans

100 Percent Fed Up
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The Biden administration has abandoned two significant student loan forgiveness plans.

Proposed regulations would have permitted the U.S. Department of Education to cancel student loans for multiple groups of borrowers.

CNBC noted that the proposed regulations included individuals who had been in repayment for decades and were facing financial hardship.

Per CNBC:

The Education department posted notices in the Federal Register last week that it was withdrawing the plans, weeks before President-elect Donald Trump enters the White House.

The Education department did not immediately respond to a request for comment.

“The Biden administration knew that the proposals for broad student loan forgiveness would have been thwarted by the Trump administration,” said higher education expert Mark Kantrowitz.

Trump is a vocal critic of student loan forgiveness, and on the campaign trail he called President Joe Biden’s efforts “vile” and “not even legal.”

Biden’s latest plans became known as a kind of “Plan B” after the Supreme Court in June 2023 struck down his first major effort to clear people’s student loans.

According to Forbes, the proposed regulations would have impacted over 30 million people.

Forbes reports:

The Biden administration officially withdrew draft regulations for two student loan forgiveness plans on Friday. The first was commonly referred to as “Plan B” in reference to Biden’s first mass debt relief plan, which would have provided $10,000 in loan forgiveness for most borrowers; the the Supreme Court struck that plan down last year. “Plan B” would have targeted debt cancellation for four broad groups of borrowers, in particular those whose loan balances have ballooned over the years due to runaway interest accrual. The plan also would have provided loan forgiveness to borrowers who attended a “low-value” school that failed to comply with federal standards, those who took student loans more than 20 or 25 years ago, and people who qualify for existing loan forgiveness programs but never applied.

The second student loan forgiveness plan would have provided relief to borrowers experiencing hardship. Much of the relief would have been implemented automatically under the plan based on a number of hardship “indicators” the Education Department had identified; these would have included a borrower’s low income, other debt burdens, eligibility for other means-tested government programs, and disability status. Other borrowers would have been allowed to submit an application for individualized review.


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