Biden pushes to finalize more student debt relief before end of term
President Biden’s Department of Education is making a final push to implement a new federal rule before President-elect Trump takes office. This rule aims to provide additional student loan forgiveness for 8 million borrowers facing financial hardships. If approved, the rule would allow for one-time student debt forgiveness for individuals deemed to have an 80% chance of defaulting on loans based on a predictive assessment using existing borrower data.
The proposed rule would also enable people, including potential future borrowers, to apply for relief based on a holistic assessment of their financial hardship. Negotiated rulemaking for higher education took place between 2023 and 2024, with discussions on this specific rule starting as early as November 2023. The rule was officially proposed on October 31 and is currently undergoing a public notice and comment period set to end on December 2.
Secretary of Education Miguel Cardona emphasized the importance of providing relief to struggling borrowers, stating, “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.” Despite previous legal challenges to Biden’s student debt forgiveness initiatives, the administration remains committed to addressing the issue.
In 2023, President Biden introduced the SAVE plan, a program aimed at reducing student debt based on borrowers’ economic circumstances. However, the Supreme Court ruled against the plan, citing that Biden lacked the authority to unilaterally forgive such a significant amount of student debt. Other efforts by the Biden administration to cancel student debt relief are also facing legal challenges.
President-elect Trump has criticized Biden’s approach to student loan forgiveness, calling it a “total catastrophe.” Trump expressed skepticism about the approval of such initiatives, citing previous court rulings. The White House has not provided a formal response to these comments.
As the Department of Education moves forward with this new rule, it remains to be seen how the transition of power to the new administration will impact student loan forgiveness initiatives. The public comment period offers stakeholders an opportunity to weigh in on the proposed rule before any decisions are finalized.
