8 million student loan borrowers would qualify for relief under Biden 'hardship' rules
The Biden administration announced on Friday proposed rules to give student debt relief to borrowers experiencing “hardship” in the president’s latest attempt to forgive student loans.
The administration has been going through the negotiated rulemaking process to get approval for more student loan relief for five different groups of borrowers.
On Friday, the administration announced 8 million borrowers would fall under the hardship group if the proposed rule is approved.
The Department of Education is defining hardship as an event or situation “likely to impair the borrower’s ability to fully repay the loan or render the costs of continued collection of the loan unjustified.”
Examples of this situation include “unexpected medical bills, high child care costs, significant expenses related to caring for loved ones with chronic illnesses, or devastating economic circumstances from the impacts of a natural disaster.”
“For far too long, our broken student loan system has made it too hard for borrowers experiencing heartbreaking and financially devastating hardships to access relief, and it’s not right,” said Secretary of Education Miguel Cardona. “The rules proposed by the Biden-Harris Administration today would provide hope to millions of struggling Americans whose challenges may make them eligible for student debt relief. President Biden, Vice President Harris, and I will not stop fighting to deliver student debt relief and create a fairer, more just, and more affordable student loan system for all borrowers.”
The new proposed rules would offer two pathways to relief, giving the education secretary power to forgive loans on a one-time basis and in the future based on certain factors such as a person’s economic situation.
The other groups that could see debt relief from this plan include individuals who have been in repayment for a long time, those who went to a career training program that was not financially successful, those whose loans exceed what they originally owed and borrowers who have been eligible for debt relief through different plans but have not received it.
The next steps for the plan will be a 30-day public comment period and another negotiated rulemaking session in February.
The fate of this plan and Biden's efforts more broadly are unclear due to the presidential election and multiple legal challenges from Republican-led states.