The Biden administration is gearing up to unveil new initiatives aimed at reducing or eliminating student loan debt for millions of borrowers, according to two sources briefed on the plans. This move represents another effort to tackle a crucial issue ahead of the November election. These anticipated proposals come nearly 10 months after the Supreme Court invalidated President Joe Biden’s initial student loan forgiveness program, which aimed to provide up to $20,000 in relief to numerous struggling borrowers.
Following this setback, the president pledged to pursue an alternative approach using a different legal basis. In response, the Department of Education began exploring alternative avenues under the Higher Education Act of 1965. It is anticipated that the upcoming proposals will be more focused than the previous program, outlining specific categories of borrowers eligible for student debt relief.
As reported by The Wall Street Journal, the administration aims to alleviate the burden of student loan debt for borrowers facing significant financial hardship, which impedes their ability to repay their loans. Additionally, these initiatives seek to alleviate the financial strain on borrowers who have accrued substantial interest over time.
President Biden is expected to outline these new proposals on Monday, coinciding with his scheduled visit to Madison, Wisconsin, where he plans to address the issue of lowering costs for Americans. After a proposed rule is announced, there could be a considerable wait before it takes effect. The proposal must undergo a public comment period before the administration can finalize the rule.
However, there’s a possibility that certain aspects of the new regulations could begin implementation as early as this autumn, according to one source. It’s important to note that the timing is subject to change. Even though the new student loan forgiveness program is based on a different law than the one invalidated by the Supreme Court, it could still encounter lengthy legal challenges if the Biden administration faces further lawsuits.
The White House opted not to provide comments on the new initiatives.The administration’s alternative approach to formulating these new proposals necessitated the Department of Education to engage in a formal rulemaking process known as “negotiated rulemaking.”