- ORIGINAL NEWS
Biden’s new student loan forgiveness plan could erase up to $20,000 in interest for millions of borrowers
- SUMMARY
President Biden has introduced a revamped plan to address the escalating student loan crisis.
This new initiative aims to reach up to 25 million borrowers by “canceling runaway interest” on their loans.
Previously, under the current system, interest rates on federal student loans could exceed 8%, making it difficult for borrowers to make progress on their balances, especially those who have fallen behind in payments or are on certain payment plans.
Over 25 million federal student borrowers now owe more than they originally borrowed.
Under Biden’s plan, borrowers could have up to $20,000 of unpaid interest forgiven, regardless of their income.
Those who qualify for the existing income-driven repayment plan would benefit even more.
Single individuals earning $120,000 or less and married couples earning $240,000 or less could have the entire amount of interest accrued on their debt canceled.
In addition to interest cancellation, Biden’s plan also proposes debt forgiveness for certain groups, including those: * Already eligible for cancellation under existing programs but haven’t applied * In repayment for 20 years (undergraduate loans) or 25 years (graduate loans) * Attended schools of questionable value * Experiencing financial hardship To qualify for these provisions, borrowers may need to enroll in income-driven repayment plans or meet specific financial criteria.
The administration has yet to define “financial hardship” but has indicated that it could include circumstances such as medical debt or high child care expenses.
The student loan forgiveness plan faces potential legal challenges.
To mitigate this, the administration is narrowing the program’s scope and targeting specific groups of borrowers for relief.
The next step is for the administration to issue a proposed rule on the plan, followed by a public comment period.
Biden hopes to implement the forgiveness measures before the November election.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“President Joe Biden unveiled his new plan to forgive student debt on Monday, less than a year after the Supreme Court blocked his initial attempt.”
“Biden wants this aid package to survive any legal challenges.”
Negative
“Today too many Americans, especially young people, are saddled with unsustainable debts in exchange for a college degree, ” Biden said from an event in Madison, Wisconsin.”
“More than 25 million federal student borrowers owe more than they originally borrowed, according to the Biden administration.”