The Biden-Harris administration proposed rules for a new student loan cancelation program Friday that could forgive the debt of up to 8 million borrowers facing “financial hardship.”
Americans facing medical debt, high childcare costs and low income could qualify under the new parameters, according to the Department of Education (DOE). The Biden administration’s previous attempts at student debt cancelation programs have all been stalled after facing constitutional concerns.
“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,” Miguel Cardona, U.S. Secretary of Education, said in a press release. “The rules proposed by the Biden-Harris Administration today would provide hope to millions of struggling Americans whose challenges may make them eligible for student debt relief. President Biden, Vice President Harris, and I will not stop fighting to deliver student debt relief and create a fairer, more just, and more affordable student loan system for all borrowers.”
Student loan borrowers and the Too Much Talent Band thank President Joe Biden and Vice President Kamala Harris for extending the student loan pause and now demand that they cancel student debt at a gathering outside The White House on January 13, 2022 in Washington, DC. (Photo by Paul Morigi/Getty Images for We, The 45 Million)
The program would allow for two separate pathways to debt cancelation, the first would give Secretary Cardona the authority to relieve a borrower’s debt without them submitting an application if the education department determines there to be an 80% chance of the borrower defaulting within two years. The second pathway requires the borrower to submit an application after which the department can “holistically assess whether a borrower is highly likely to be in default or experience similarly severe negative and persistent circumstances” from paying off the loans.
The Education Department would then be permitted to waive some or all of the borrower’s debt if it determines there to be “persistent financial burdens” affecting the borrower.
Biden’s previous attempts at canceling student debt have all fallen flat, with the Supreme Court shooting down one program in 2023 after it was determined the education secretary lacked the authority. A later version that would have cut payments and interest rates based on a borrower’s income level has been halted by a Missouri court over similar constitutionality concerns. (RELATED: Biden-Harris Admin Has Forgiven Total Of $74 Billion In Student Loans Just For Gov’t Workers)
The Department of Education did not immediately respond to the Daily Caller News Foundation’s request for comment.
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