- The Biden administration is again gearing up to try to forgive the student debt of tens of millions of Americans, after the Supreme Court struck down its first effort last year.
- Now, the president has directed the U.S. Department of Education to pursue the regulatory process.
- In the coming days, the Education Department will begin emailing borrowers who may be eligible for the wide-scale loan cancellation, the department said on Wednesday.
The Biden administration is gearing up to try to forgive the student debt of tens of millions of Americans again, after the Supreme Court struck down its first effort last year.
In the coming days, the U.S. Department of Education will begin emailing borrowers who may be eligible for the wide-scale loan cancellation, the department said on Wednesday. It hopes to deliver that relief in the fall, possibly weeks before the 2024 presidential election.
“Today, the Biden-Harris administration takes another step forward in our drive to deliver student debt relief to borrowers who’ve been failed by a broken system,” U.S. Secretary of Education Miguel Cardona said in a statement.
More from Personal Finance:
How to find out how big your Social Security benefits may be
IRS issues final rules for inherited IRAs
How kids from rich families learn about money
If, for some reason, a borrower wants to opt out of the debt forgiveness, they must do so by Aug. 30 with their loan servicer, the Education Department said.
Borrowers who are likely to qualify for partial or full debt erasure include those who owe more now than they did at the start of repayment and people who have been paying on their loans for decades.
‘Ready to go as soon as the final rule is published’
The same day the Supreme Court blocked President Joe Biden’s first attempt at sweeping student loan forgiveness, he announced that the White House would try to deliver the relief another way.
Originally, the president attempted to cancel the debt through an executive action. This time he has directed the Education Department to pursue the regulatory process, which experts say should increase its chances of surviving the inevitable next round of legal challenges.
The Education Department is expected to publish its final rule on the debt relief sometime in October.
Wednesday’s announcement suggests the agency plans to act swiftly once the rule is in effect, said higher education expert Mark Kantrowitz.
“Undoubtedly the Biden Administration will be ready to go as soon as the final rule is published, but Republicans may also be ready to file a lawsuit,” Kantrowitz said.
It was a lawsuit brought by six GOP-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — that eventually led to the demise of Biden’s first loan forgiveness plan.
The emails may also be a strategy by the Biden team to show millions of Americans that the loan forgiveness is at stake in the election, Kantrowitz said.
“It shows the borrowers what they stand to lose if Republicans win,” he said.
Rep. Virginia Foxx, R-N.C., criticized the latest development.
“The Biden-Harris administration continues to dangle loan ‘forgiveness’ in front of millions of borrowers across the nation,” Foxx said in a statement. “This is just another illegal scheme intended to buy votes in November.”
This is breaking news. Please check back for updates.
