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    • Biden Proposes Canceling Student Loans for Financial Hardships – Here’s Who Might Qualify
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    Biden Proposes Canceling Student Loans for Financial Hardships – Here’s Who Might Qualify

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    The top line

    About 8 million student loan borrowers could have their debt forgiven under a new plan to help Americans facing “financially devastating hardship,” the Biden administration said. he announced On Friday, the latest proposal to cut student loans, as defended by the Department of Education another plan against legal challenges.

    Key facts

    The new plan, if finalized, would allow the Biden administration to write off loans for borrowers the Education Department deems to have an 80 percent chance of defaulting within two years, the agency said. said.

    Borrowers can apply for relief under the new plan by showing they have “persistent financial burdens” that prevent them from repaying their loans, including unexpected medical bills, high child care costs, “significant expenses” while caring for loved ones with chronic illnesses or “devastating” economic circumstances from the impact of a natural disaster.

    The Education Department said there are 17 “non-exclusive factors” from existing data that would be used to determine whether a borrower would qualify without requiring them to apply for relief, including household income, assets, types and balances of student loans and debt . balances, among others.

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    What to watch

    The Education Department has 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 if a new administration will approve them (Donald Trump has criticized balance reduction or elimination plans for student loan borrowers). Other student loan forgiveness proposals have faced challenges in court: The administration’s Savings to Value Education (SAVE) plan was temporarily blocked after legal challenges from Republican-led states that say the plan is “illegal” and places a financial burden on states.

    Big number

    4.5 billion dollars. Both the Biden administration approved in canceling student loans earlier this month for more than 60,000 borrowers enrolled in the Public Service Loan Forgiveness Program (PSLF). PSLF is designed to provide debt relief for public servants such as teachers, nurses, social workers, first responders and others who have made payments for 10 years. According to the Department of Education, about $175.4 billion was forgiven for nearly 5 million Americans during the Biden administration.

    Key background

    Canceling student loans for those with financial difficulties was first proposed in another debt relief plan, but was according to reports broken to become a new, separate proposition. President Joe Biden originally planned to cancel up to $20,000 in student debt for people with incomes below $125,000, though the Supreme Court ruled that Biden overstepped his authority. The Biden administration considered loan forgiveness for struggling borrowers in a second plan introduced in February, with considerations on whether the borrower has high-cost, unavoidable expenses such as child care or health care, Associated Press . reported.

    Further reading

    ForbesBiden approves another $4.5 billion in student loan forgiveness – Here’s who qualifiesOf Ty Roush
    ForbesBiden extends break on some student loans for six monthsOf Molly Bohannon

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