Biden's student loan cancellation plan moving forward
WASHINGTON >> President Joe Biden's latest plan for student loan cancellation is moving forward as a proposed regulation, offering him a fresh chance to deliver on a campaign promise and energize young voters ahead of the November election.
The Education Department on Tuesday filed paperwork for a new regulation that would deliver the cancellation that Biden announced last week.
It still has to go through a 30-day public comment period and another review before it can be finalized.
It's a more targeted proposal than the one the U.S. Supreme Court struck down last year. The new plan uses a different legal basis and seeks to cancel or reduce loans for more than 25 million Americans.
Conservative opponents, who see it as an unfair burden for taxpayers who didn't attend college, have threatened to challenge it in court.
The Democratic president highlighted the the plan during a trip to Wisconsin last week, saying it would provide “lifechanging” relief. He laid out five categories of people who would be eligible for help.
The new paperwork filed by the Education Department includes four of those categories, while a separate proposal will be filed later addressing how people facing various kinds of hardship can get relief.
The broadest forgiveness category would help borrowers who owe more than they originally borrowed because of runaway interest. It would eliminate up to $20,000 in interest for anyone in that situation, while those with annual incomes below $120,000 and enrolled in incomedriven repayment plans would get all their interest erased with no maximum limit. It would be done automatically.
Another category would cancel loans for people who have been paying back their undergraduate student loans for at least 20 years, and those who have been paying graduate loans at last 25 years.
It would automatically cancel loans for those who went to colleges or programs considered to have low financial value.
Borrowers would be eligible for cancellation if they attended a program that leave graduates with earnings no better than those with a high school diploma, for example, or programs that leave graduates with large shares of debt compared with their incomes.