2 weeks Ago
Topline About 8 million student loan borrowers could have their debts forgiven under a new plan to help Americans dealing with “financially devastating hardships,” the Biden administration announced Friday, the latest proposal to reduce student loans as the Education Department defends another plan against legal challenges. Key Facts Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here .
What To Watch For The Education Department said it expects to finalize the regulations in 2025, though it’s not immediately clear whether they will be finalized before Biden leaves office in January—or whether a new administration would approve them (Donald Trump has also criticized plans to reduce or eliminate balances for student loan borrowers). Other student loan forgiveness proposals have faced court challenges: The administration’s Saving on Valuable Education (SAVE) plan has been temporarily blocked after legal challenges by Republicans-led states that claim the plan is “unlawful” and places a financial burden on the states. Big Number $4.
5 billion. That’s how much the Biden administration approved in student loan forgiveness earlier this month for more than 60,000 borrowers enrolled in the Public Service Loan Forgiveness Program (PSLF). The PSLF is designed to provide debt relief for public servants like teachers, nurses, social workers, first responders and others who have made 10 years of payments.
According to the Education Department, about $175.4 billion has been forgiven for nearly 5 million Americans during the Biden administration. Key Background Canceling student loans for those with financial hardships was first proposed in another debt relief plan, but was reportedly broken off to become a new, separate proposal.
President Joe Biden initially planned to cancel up to $20,000 in student debt for people with incomes below $125,000, though the Supreme Court ruled Biden had overstepped his authority. The Biden administration considered forgiving loans for borrowers facing financial hardships in a second plan introduced in February, with considerations about whether the borrower has high-cost, unavoidable expenses like childcare or healthcare, the Associated Press reported . Further Reading.
