Another major student debt cancellation

    The Biden administration is continuing its work on student debt relief by unveiling a new plan that would bring the number of borrowers who have had some or all of their debt forgiven to more than 30 million since the administration started this effort. 

The first element of the plan would allow borrowers of all income levels to cancel up to $20,000 in interest. According to the administration, more than 25 million borrowers owe more now than they took out originally due to “runaway interest.” 

The plan would also allow qualified borrowers to receive debt relief without enrolling in debt cancellation programs, as the Education Department would use data to identify these borrowers and automatically credit their accounts.

The administration noted that over 2 million eligible borrowers have not applied for programs for which they are eligible.  The new proposals would also help long-term borrowers. According to the Education Department, more than 2.5 million borrowers have carried student loan debt for more than two decades.

Under the plan, borrowers carrying undergraduate debt would qualify for forgiveness if they started repayment on or before July 1, 2005. Borrowers with graduate school debt would qualify if they started repayment on or before the same date in 2000.

The plan is expected to face legal challenges, and it will take some time before the new proposals are put into place and borrowers see their debt relieved.  Read more about this HERE