Pres. Joe Biden traveled to Madison, Wisc. while Vice Pres. Kamala Harris traveled to Philadelphia, Penn. to announce their latest student debt relief plan.
Pennsylvania and Wisconsin are swing states, which means voters could go either way in the upcoming 2024 presidential election.
This is the Biden administration’s latest effort to sway voters for the upcoming battle against former Pres. Donald Trump.
According to whitehouse.gov, “The plan will provide debt relief to over 30 million Americans when combined with actions the Biden-Harris Administration has already taken to cancel student debt over the past three years.”
Biden has many income-driven repayment plans for borrowers already, such as the Saving on a Valuable Education (SAVE) Plan. This plan calculates a monthly payment amount based on family size and income.
The SAVE plan “cuts undergraduate loan payments in half, ensures borrowers never see their balance grow from unpaid interest, helps drop millions of borrowers’ monthly payments down to $0 and cancels debt for low-balance borrowers faster.”
Groups who may benefit from the new debt relief plan include borrowers enrolled in Biden’s SAVE plan. Other income-driven repayment plans could retire $20,000 from the debt of people whose balances increased because of interest.
Borrowers who have not applied for loan forgiveness plans but are eligible could have their debts automatically canceled under the new plan. Borrowers with undergraduate student debt who started repaying their loans more than 20 years ago and graduate students repaying their loans from more than 25 years ago would have their debts canceled.
Students who were left with large amounts of debt from their institutions or programs that didn’t provide them with job prospects or small earning opportunities could have their debts waived. The same goes for students enrolled in colleges or programs that lost federal funding because of cheating or defrauding students.
Borrowers who have trouble paying back their loans because of medical or childcare costs would also be eligible for some type of relief but is not yet determined.
This new plan could erase $4 million dollars for 25 million borrowers and 10 million borrowers could see debt relief of $5,000 or more.
Biden originally tried to grant $400 billion in debt relief to 40 million borrowers in the Higher Education Relief Opportunities for Students Act of 2003, or HEROES Act. The administration argued that the government was allowed to waive student debt during a national emergency such as COVID.
But the U.S. Supreme Court rejected the plan because, according to the decision, the HEROES Act did not authorize the president to forgive student loans.
The new plan works under the Higher Education Act, a federal law that regulates student loan and grant programs. It targets specific groups of borrowers rather than offering broad loan forgiveness.
After the rejection of the HEROES Act, “The Department of Education began pursuing an alternative path to debt relief through negotiated rulemaking under the Higher Education Act,” according to WhiteHouse.gov.
Under the university’s financial aid website, students can access their portal on studentaid.gov to view their loans. There are other resources to help students learn if they qualify for loan forgiveness, when and how to pay back their loans and even how to apply for federal loans.
Biden’s new student debt relief plan will need to be published in the Federal Register and then will enter a months-long public comment period before it takes effect.