OAN’s Brooke Mallory
12:01 PM – Monday, April 8, 2024
If approved, a new student loan policy that the Biden administration unveiled on Monday will take away debt payments for millions of Americans.
However, edworkforce.house.gov reported: “There is no such thing as ‘forgiveness,’ and student loan debt does not go away—it remains on the federal government’s books. Cancelation alone is estimated to cost at least $400 billion dollars. The Biden administration simply [would move] the loan debt, agreed to by millions of student loan borrowers, onto the backs of American taxpayers. Biden’s student loan bailout will cost every taxpayer, even those who never went to college, at least $2,500.”
The suggested programs would primarily impact borrowers who qualify for income-driven repayment (IDR) plans, those who have been making loan payments for 20 years, those who have “runaway interest,” or “those facing hardship.”
Regardless of income, the plan would grant debtors $20,000 in loan forgiveness for sums that had increased as a result of unpaid interest since beginning payments. The entire amount of unpaid interest would be waived for those who meet the requirements of the SAVE IDR scheme.
As a result, “23 million Americans” would have their whole debt growth erased, and 25 million would receive relief from balance growth resulting from unpaid interest.
Additionally, the government wants to automatically waive debt for people who meet the requirements of the SAVE plan, the Public Service Loan Forgiveness program, and other loan forgiveness schemes. With this option, an estimated 2 million Americans would receive complete loan forgiveness.
Finally, the administration seeks to provide relief to borrowers who are having difficulty repaying their loans, including those who are at high risk of defaulting and families who are struggling with additional debt, such as medical bills, as well as those who were enrolled in low-value education programs that the Department of Education has determined to be inadequate.
“The Biden-Harris Administration plans to release proposed rules on these plans over the coming months. If these plans are finalized as proposed, this fall the Administration would begin canceling up to $20,000 in interest for millions of borrowers and full loan forgiveness for millions more,” the administration said.
The White House also highlighted how this move could benefit community college graduates, specifically Black and Latino borrowers, who are statistically more likely to struggle with student loan debt in comparison to Whites and Asians, the administration claims.
“These actions are expected to provide significant relief to Black and Latino borrowers, borrowers who attended community college, and borrowers who are financially vulnerable because they took out debt but never had the chance to complete their degree,” the administration added.
Meanwhile, it will still take months to find out if these proposals will be approved. The plans are also expected to be contested in court if they are approved.
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