Overview
President Joe Biden announced new rules aimed at expanding student loan debt relief to millions of additional borrowers. This initiative is set to provide significant financial relief to those burdened by student loans and improve the overall student loan system.
Why It Matters
This initiative addresses the critical issue of student debt, aiming to ease the financial burden on American families and ensure higher education remains accessible and affordable.
Who It Impacts
This affects millions of student loan borrowers across the United States, particularly those with long-standing debt and those disadvantaged by high-interest rates and low-value education programs.
President Joe Biden unveiled new rules on July 31 designed to extend student loan debt relief to millions more Americans. The announcement marks a significant step in the administration’s ongoing efforts to alleviate the financial burden of student debt on borrowers nationwide.
“Today, my Administration took another major step to cancel student debt for approximately 30 million Americans,” Biden stated. He emphasized the administration’s commitment to continuing the fight for student loan borrowers, aiming to repair what he described as a broken system and provide much-needed relief.
Starting August 1, the Education Department will begin emailing all borrowers with at least one outstanding federal student loan. These emails will include updates on potential debt relief and notify borrowers of the August 30 deadline to opt out if they do not wish to participate in the program. It is important to note that receiving an email does not guarantee eligibility for debt relief.
The finalized rules, expected this fall, build on the administration’s existing efforts, which have already provided $168 billion in student loan relief to nearly 4.8 million borrowers. If implemented as proposed, the new regulations will increase the number of eligible borrowers to over 30 million. This includes those already approved under previous relief efforts.
Education Secretary Miguel Cardona highlighted the broader implications of these measures. “These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest,” Cardona explained. He noted that the relief would benefit those who have been paying their loans for over 20 years, those who took on debt for low-value programs, and many others struggling under the weight of their student loans.
The proposed rules would grant partial or full debt relief to borrowers who owe more now than when they started repayment, those who have been in repayment for over 20 years, and those eligible for loan forgiveness who have not yet applied. Additionally, borrowers enrolled in low-financial value programs would also be eligible for relief. The Education Department assured that if the rules are approved, the relief would automatically apply to eligible borrowers, with an option to opt out by contacting their servicer by August 30.
To date, the Biden–Harris administration has approved substantial debt relief across various programs: $69.2 billion through Public Service Loan Forgiveness, $51 billion through adjustments to income-driven repayment counts, and $28.7 billion for borrowers who were defrauded by their schools or experienced abrupt school closures. Additional relief includes $14.1 billion for borrowers with total and permanent disabilities and $5.5 billion through the SAVE Plan.
