- ORIGINAL NEWS
Biden administration releases draft text of student loan forgiveness plan. Here’s what borrowers need to know
- SUMMARY
The Biden administration has unveiled a revised plan for student loan forgiveness to ease the financial burden on millions of borrowers.
The draft proposal includes key changes and expands eligibility criteria compared to previous attempts.
To begin with, the plan targets specific groups of borrowers: * Those who qualify for existing loan cancellation programs but haven’t applied.
* Borrowers who have been repaying undergraduate loans for at least 20 years or graduate loans for over 25 years.
* Individuals who attended schools with questionable educational value.
Additionally, borrowers with federal student debt will receive up to $20,000 in unpaid interest forgiven, regardless of their income.
This draft proposal is expected to be published in the Federal Register on Wednesday and will be open for a 30-day public comment period.
After reviewing the feedback, the Education Department aims to finalize the rules and start canceling debts in the fall.
One notable exclusion from the current draft is a provision for borrowers experiencing financial hardship.
The department plans to release a separate draft rule addressing this group in the future.
The Biden administration reemphasizes its commitment to address inequities in the higher education system and improve financial accessibility for students and borrowers.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“The Biden administration released the draft text of its new student loan forgiveness proposal, which could reduce or eliminate the balances of millions of borrowers.”
“The regulatory text comes about a week after President Joe Biden revealed the details of his Plan B for student loan forgiveness.”
Negative
“The Biden administration also said that, if its new plan is enacted as proposed, borrowers will get up to $20,000 of unpaid interest on their federal student debt forgiven, regardless of their income.”
“The draft text echoes much of that announcement. However, the Education Department left out from its relief plan, for now, the group of borrowers experiencing financial hardship.”