Democrat President Joe Biden’s administration has issued an updated student loan relief plan after the initial version was struck down by the U.S. Supreme Court earlier this year.
The Department of Education (DOE) released a draft text on Monday that shows a new, narrower plan.
The latest version of the scheme would allow student debt forgiveness to apply only to specific groups of students rather than being a blanket rule.
Under the original plan, American taxpayers would pay off the debts of some 45 million college-educated voters.
Biden’s first student loan proposal would have promised up to $20,000 in debt relief for low- and middle-income individuals.
However, this plan was struck down by the Supreme Court in June.
Secretary of Education Miguel Cardona issued a statement about the proposal.
“President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” Cardona said.
“These draft proposals would build on the historic $127 billion in loan forgiveness the Biden-Harris Administration has already approved for nearly 3.6 million borrowers.
“We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education.”
However, the DOE has yet to release the full details of the plan.
The department says that it wants to cancel some or all student debt for borrowers who meet the following criteria:
- Those whose balances exceed what they originally owed
- Those who have loans that entered repayment 25 or more years ago
- Those who used loans to attend career-training programs that led to “unreasonable” debt loads or insufficient earnings
- Those who are eligible for other loan forgiveness programs but did not apply.
The DOE also confirmed that a fifth group is also being discussed, or “those who are experiencing financial hardship that the current student loan system does not currently adequately address.”
The draft does not include details about how many borrowers would be impacted by the federal government’s latest plan.
It also did not include details about how much it may cost.
The draft proposal would give the DOE authority to wipe away federal student loans entirely for borrowers in some categories.
Through existing student loan forgiveness programs for specific individuals, the Biden administration has already canceled more than $120 billion in federal student loan debt.
Previously, the president called for a plan to help “as many borrowers as possible.”
However, his administration seems to be moving away from the type of mass cancellation that he promised in August 2022.
The previous plan was estimated to cost taxpayers $400 billion.
It’s unclear how much the second proposal will cost.
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