The Biden administration on Monday announced a new plan to provide student loan debt relief for millions of borrowers.
White House officials estimate about 25 million Americans could benefit from the changes President Joe Biden outlined in a speech in Wisconsin. The average student loan debt in Georgia is about $40,000, only behind Washington, D.C., and Maryland.
The U.S. Supreme Court last year struck down a separate plan by Biden to offer student loan debt forgiveness.
Here are some details of the latest plan:
What would it do?
The plan calls for canceling up to $20,000 of the borrower’s balance that has grown due to unpaid interest on their loans after entering repayment, regardless of the borrower’s income. Some borrowers would receive full loan forgiveness. The proposed plan would automatically cancel the loans of people who have been in repayment on undergraduate loans for at least 20 years, and graduate loans for 25 years or more.
Who else would it specifically help?
Many borrowers enrolled in the Saving on a Valuable Education (SAVE) plan or any other income-driven repayment (IDR) plan would be eligible for waiver of the entire amount their balance has grown since entering repayment. Those eligible would include single borrowers whose annual salaries are $120,000 or less and married borrowers who file joint tax returns who earn $240,000 or less.
Is there anything borrowers would need to do to be eligible?
The proposed plan would automatically cancel debt for borrowers otherwise eligible for relief through the SAVE plan, closed school loan discharges, or other forgiveness opportunities but who have not successfully applied for that assistance.
When does it begin?
The new plan will require a monthslong public comment period before it can take effect. Some provisions, such as the interest cancellation, may be implemented by this fall, officials said.
Can it be challenged?
White House officials said the plan is being done under the U.S. secretary of education’s authority under the Higher Education Act. White House officials told reporters in a briefing they are “very confident” the changes are covered under the act. Officials also expect legal challenges from Republicans, which could take months to resolve, The New York Times reported.
Information from The Washington Post was used in this report.
