Biden makes final push for student loan forgiveness before Trump takes office
President Biden is pushing to cancel more student debt before the end of his term, despite facing obstacles in his efforts to eliminate billions of dollars in borrowed money. The Department of Education recently announced an interim final rule to extend the deadline for student loan borrowers to enroll in long-term pay-over-time programs.
The new provision would amend the Income Contingent Repayment (ICR) to allow borrowers to enroll in ICR or Pay-As-You-Earn (PAYE) programs, which forgive all student debt after 20 years of on-time payments. The enrollment deadline would be extended by three years, from July 2024 to July 2027. However, the regulations are set to go into effect in July 2026, potentially allowing the incoming Trump administration to intercept any debt relief initiatives.
This announcement follows another recent rule proposed by the Biden administration, which would authorize one-time student debt forgiveness for individuals deemed to have an 80% chance of defaulting based on existing borrower data. Additionally, plans were unveiled to eliminate $4.5 billion in debt for over 60,000 public service workers.
President Biden had promised during his campaign to forgive student loans for millions of Americans, but has faced legal challenges in his attempts to erase hundreds of billions in debt. His initial plan aimed to provide up to $10,000 in debt relief, with up to $20,000 for Pell Grant recipients earning less than $125,000 annually, costing an estimated $400 billion. However, a Supreme Court ruling in June 2023 limited the Secretary of Education’s authority to cancel over $430 billion in student debt.
Undeterred, Biden proposed a second plan to cancel up to $20,000 in interest for borrowers who owe more than they borrowed, and forgive all debt for those repaying undergraduate loans for over 20 years. The incoming Trump administration has not outlined specific plans for addressing Biden’s student loan forgiveness initiatives but intends to revamp the education system during its term.
Former Education Secretary Betsy DeVos, under the Trump administration, emphasized the need for reevaluation of Biden’s student loan forgiveness efforts, suggesting a return to private sector lending options. As the transition of power approaches, the future of student debt relief remains uncertain.
In conclusion, President Biden continues to push for student debt relief initiatives as his term nears its end, but the outcome remains uncertain given the legal challenges and potential policy changes under the incoming administration. Stay tuned for updates on this evolving issue.
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