President Biden has announced a new plan to forgive student loan debt. This revised plan aims to target specific groups of borrowers, including those facing financial hardship. It offers up to $20,000 of debt forgiveness for undergraduate loans and $20,000 for unpaid interest on federal loans. The plan is expected to face legal challenges, as the Supreme Court previously struck down a similar attempt.
The Biden administration is introducing a new plan to forgive student loans, potentially benefiting 10 million Americans. This plan, narrower than a previous one blocked by the Supreme Court, targets borrowers facing financial hardship or in repayment for extended periods. The administration believes this revised plan will withstand legal challenges and will be implemented through the rulemaking process. A public comment period will follow its release for feedback.
The Biden administration's updated bankruptcy policy makes it easier for borrowers to discharge student loan debt. Borrowers can now apply for a discharge by completing a form outlining their financial hardships. Although bankruptcy can be beneficial for individuals in extreme financial distress, most should explore other options like income-based repayment plans and loan forgiveness programs. The government may also announce a revised student debt forgiveness package soon, so waiting to see what relief is available is advisable.
