President Joe Biden is making another move to forgive student debt for millions of borrowers.
The Biden-Harris administration announced Wednesday that it will begin emailing borrowers on Thursday with information regarding its proposed rules to allow the Secretary of Education to forgive debt for certain federal student loan borrowers.
The email will not specify which borrowers are eligible for the forthcoming relief, nor will receiving an email guarantee eligibility for forgiveness, the administration said in a statement. Borrowers will have until August 30 to contact their loan servicer to opt out of any relief they may otherwise receive.
“The Biden-Harris Administration made a commitment to deliver student debt relief to as many borrowers as possible as quickly as possible, and today, as we near the end of a lengthy rulemaking process, we’re one step closer to keeping that promise,” Secretary of Education Miguel Cardona said in the statement.
A draft of the proposed rules was released back in April before going through a public comment period as part of the negotiated rulemaking process — the lengthy one Cardona refers to. This plan has been in the works since the Supreme Court struck down Biden’s initial plan to forgive up to $20,000 of debt per borrower back in June 2023.
The administration says if the rules are finalized as drafted, eligible borrowers shouldn’t have to take any action to see debt relief. Borrowers who choose to opt out, however, will not have the opportunity to opt back in.
“By providing more information to borrowers on how they can take advantage of our upcoming debt relief programs, borrowers will be prepared to benefit swiftly once the rules are final,” Biden said in a statement.
4 groups of borrowers to see debt forgiveness
As previously reported, the Biden administration’s plan prioritizes borrowers who’ve been in repayment for many years, those who’ve been burdened by “runaway interest” and borrowers who were left with debt from under-performing institutions.
Here are the four groups of borrowers slated to start seeing partial or total loan forgiveness if the rules are finalized this fall:
- Borrowers who owe more than they initially borrowed
- Borrowers who have been in repayment for more than 20 years for undergraduate loans or 25 years for graduate loans
- Borrowers who would be eligible for other forgiveness programs like income-driven repayment or closed school discharge, but haven’t applied
- Borrowers who enrolled in low-financial value programs
The administration expects that providing forgiveness for these groups will bring the total number of borrowers eligible for student debt relief up to 30 million.
Thus far, the administration has approved $168 billion in debt relief for nearly 5 million borrowers through income-driven repayment and Public Service Loan Forgiveness programs as well as disability discharge and for students defrauded by their academic institutions.
Another group of borrowers — those experiencing financial hardship — can expect a separate proposal to receive debt relief in the coming months, the administration said. The proposed rule still needs to go through a public comment period, but will aim to automatically forgive debt for borrowers at high risk of default or who show other difficulties like high medical costs.
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