President Joe Biden announced new regulations on Wednesday that would make millions of borrowers eligible for student loan debt relief.
Biden stated, “Today, my administration took another important step in forgiving student debt for approximately 30 million Americans.” He added, “We will continue to work towards providing relief for student loan borrowers, repairing the broken student loan system, and helping borrowers alleviate the burden of student debt.”
Starting from August 1st, the Department of Education will be sending emails to all borrowers with at least one outstanding federal student loan, outlining the latest updates on potential debt relief and informing them that they have until the deadline of August 30th to opt-out by calling if they are not interested in the plan. The email does not guarantee eligibility for the program.
In the fall of this year, the Department of Education will finalize the relief rules based on existing government efforts to provide $168 billion in student loan forgiveness for nearly 4.8 million borrowers. If these proposed rules are confirmed, the number of eligible borrowers for student loan relief could increase to over 30 million, including those who are already approved.
Education Secretary Miguel Cardona stated in a release, “These latest measures mark another milestone on our path to helping millions of borrowers alleviate their loans; these borrowers are either struggling under the weight of student loan interests, burdened with debt to pay for their university education leading to worsened financial situations, or have been repaying for twenty years or longer, among other circumstances.”
The White House released the initial draft of regulations in April, directing Cardona to further forgive student debt for tens of millions of borrowers, including those whose debts have been increasing due to years of interest.
Should the rules be finalized, they would allow Cardona to offer partial or full debt relief to borrowers who owe more than the initial amount borrowed, have been repaying for over 20 years, are eligible for loan forgiveness but have not applied, and those who participated in low-financial value degree programs.
The Department of Education noted that if approved, the proposed relief plans would automatically apply to qualifying borrowers.
Borrowers may contact their servicers before August 30th if they wish to opt-out of debt relief, but they will not be able to rejoin the program once they opt-out.
To date, the Biden-Harris administration has approved $69.2 billion for 946,000 borrowers through the Public Service Loan Forgiveness program, $51 billion for over a million borrowers through adjusted income-driven repayment amounts, and $28.7 billion for over 1.6 million borrowers who were “defrauded by schools, watched their institutions shut down before their eyes, or were covered by related court settlements.”
The government has also distributed $14.1 billion through the SAVE Plan to over 548,000 borrowers with total and permanent disabilities and $5.5 billion to 414,000 borrowers.
President Biden emphasized, “From my first day in office, I promised to ensure that higher education is a ticket to the middle class, not a barrier to opportunity.”
Biden also vowed, “I will never stop working to make higher education affordable and ensure that our government delivers for the American people.”