WASHINGTON (NEXSTAR) – The Biden administration is unveiling a proposal that would expand student loan forgiveness to Americans who are struggling to pay off their loans because of financial hardship.
“We see there are families across the country that’s crushed by student debt and that shouldn’t be,” Karine Jean-Pierre White House Press Secretary said during a briefing on Thursday.
According to the Department of Education, the proposal would outline factors that could be used to identify financial hardship, including a borrower’s student loan balance and required payments relative to household income.
Thursday’s announcement comes after the Supreme Court rejected President Joe Biden’s previous attempt to wipeout more than $400 billion in student debt last year.
“We believe that this will stand up in court,” Jean-Pierre said. “But it’s not going to stop the president trying to figure out more ways, more ways to continue to make sure we give relief to borrowers across the country.”
The new proposal crafted by the Department of Education focuses on several categories of borrowers who could get some or all of their loans canceled.
It includes those who are experiencing financial hardship, have loan balances that exceed what they originally borrowed, have been repaying their loans for at least 20 or 25 years (depending on the type of loan), went to a for-profit college program that leaves them unable to repay their federal student loans and those eligible for forgiveness under repayment plans like the SAVE plan or targeted relief programs.
The proposal will have to go through a rulemaking process that is expected to take months, and it will almost certainly face a legal challenge.
The Associated Press contributed to this report.
