With the goal of forgiving loans to around 8 million borrowers who are undergoing financial difficulties, the Biden-Harris administration has put up a historic plan to relieve student debt. This initiative, which was introduced by the Department of Education on October 25, 2024, provides a lifeline to people who are struggling financially due to high medical expenditures, childcare fees, and other issues.
There are two ways for debtors to get their loans forgiven under the new rule. First, borrowers will automatically qualify for assistance without having to apply if they have an 80% likelihood of failing within two years. Second, through a comprehensive evaluation procedure, present and future borrowers who demonstrate “severe negative and persistent circumstances” may seek for relief.
This plan expands on the administration’s impressive history of helping borrowers. Over $170 billion in student loan debt forgiveness for almost 5 million debtors has been authorized by the Biden-Harris administration so far. This includes $16.2 billion for roughly 572,000 borrowers with total and permanent disabilities, $74 billion for more than 1 million public service employees through the Public Service Loan Forgiveness program, $56.5 billion for more than 1.4 million borrowers through Income-Driven Repayment, and $28.7 billion for more than 1.6 million borrowers impacted by school closures or deception.
There are now over 1 million public servants with cancelled loans after the Biden administration recently granted an extra $4.5 billion in student debt relief for over 60,000 of them. “The regulations that the Biden-Harris Administration today is proposing would give hope to millions of Americans who are struggling,” said US Secretary of Education Miguel Cardona. We will not give up on reducing student loan debt and building a more equitable, just, and cost-effective system for all borrowers.
After a 30-day public comment period, the proposal will be finalized in 2025 after being published in the Federal Register in the upcoming weeks. Millions of borrowers’ lives might be changed by this historic initiative, which would offer a vital safety net and a fresh start.
