Biden Pursues Student-Debt Relief for About 26 Million Americans

President Joe Biden’s alternative student-debt relief plan could forgive loans for as many as 26 million Americans, a far-reaching initiative that will be tested by the same challenges that beset his original program struck down by the Supreme Court.

The proposal, outlined by the White House on Monday, must withstand expected lawsuits that could stretch into next year, placing the issue of rising student debt squarely in the crosshairs of November’s presidential election. A lengthy regulatory process also threatens to prevent relief if a new administration scraps the plan.

The measures would apply to borrowers who meet certain criteria, including people whose debt exceeds their original principal amount and those who qualify for federal programs but have not been enrolled. Other categories include individuals who have made payments for more than 20 years, students who attended “low-financial-value” programs and those experiencing financial hardship.

An estimated 25 million borrowers would have their accrued interest fully or partially eliminated, more than 10 million borrowers would see at least $5,000 in debt cancelled, and 4 million borrowers would have their balances cleared, according to a White House fact sheet. Around 2 million people who are eligible for government programs, such as public service loan forgiveness or closed-school discharge for institutions that shuttered during enrollment, could have their loans automatically forgiven.

Senior administration officials, who previewed the details of the plan, said relief for borrowers with accrued interest could occur as soon as this fall. However, the timeline is unclear for when all potential beneficiaries could see cancellation.

Biden, who faces tough re-election prospects against former President Donald Trump, will outline his latest plan on Monday to tackle the skyrocketing costs of college in Madison, Wisconsin, which is home to thousands of college students. Young voters were crucial to Biden’s victory in 2020, when he vowed to cancel student loans as a candidate.