The administration of U.S. President Biden announced a new Student Debt Relief Plan that will forgive $39 billion for over 800,000 borrowers. This initiative comes weeks after the Supreme Court struck down the original program.On July 14, the administration of U.S. President Joe Biden announced a new Student Debt Relief Plan that will forgive $39 billion in student loans for more than 800,000 student borrowers. This initiative came just weeks after the U.S. Supreme Court decided to strike down the original Student Debt Relief Plan Biden had to address student loans.
However, according to Quinn, unlike the original Student Debt Relief Plan, the anticipated loan forgiveness by the Department of Education is smaller which came from the “fixes” announced last April. Reports say the fixes intend to guarantee that the student borrowers who enrolled in income-driven repayment plans will have an accurate number of monthly payments.
New Student Debt Relief Plan
An article in Reuters states that the new Student Debt Relief Plan is based on a different law from the Student Debt Relief Plan that was struck down by the Supreme Court. In the new Student Debt Relief Plan, a student borrower is qualified for loan forgiveness under the Higher Education Act of 1965.
In addition, federal regulations state that with the new Student Debt Relief Plan, a student borrower must make 240 to 300 eligible monthly payments or around 20 to 25 years of payments on an income-driven or standard repayment plan.