Biden admin aims for new student loan relief plan this year
After the Supreme Court struck down a federal student loan forgiveness program designed to erase the debts of more than 40 million borrowers, the Biden administration is now just one step away from finalizing a rule to replace it.
WASHINGTON (NEXSTAR) – After the Supreme Court struck down a federal student loan forgiveness program designed to erase the debts of more than 40 million borrowers, the Biden administration is now just one step away from finalizing a rule to replace it.
U.S. Education Secretary Miguel Cardona says the rule is going through the negotiated rule making process slowly but expects it move forward this year.
The proposal is under review at the Office of Management and Budget, the final step before it can be released for comment.
"We're being as aggressive as possible,” said Cardona.
The proposal is designed to help a large number of borrowers, not already covered by smaller, existing loan forgiveness programs.
Groups like the NAACP are happy to hear about the progress but are pushing the administration not to leave anyone hanging.
"It's a major concern when it comes to homeownership, when it comes to building families to generation wealth,” says Amari Fennoy.
"We've talked about Pell grant recipients; we've talked about parent plus loan borrowers, we've talked about actual people who are impacted by these rules."
How much the program will cost or who exactly stands to benefit is unclear.
The Department of Education’s website only states the rule under review will include borrowers, “whose balances exceed what they originally borrowed, who first entered repayment long ago, who are eligible for relief but have not applied for it, or who attended programs or institutions that failed to provide sufficient financial value.”
Adam Kissel with the conservative Heritage Foundation doubts the new plan will make it far.
"I anticipate that as many as a dozen states will sue the Education department,” says Kissel. “Such large-scale forgiveness is not what Congress authorized."
Cardona argues he is legally authorized to forgive student debt under the Higher Education Act of 1965.