Watch: President Biden announces new student loan forgiveness plan

Personal finance

[This stream is set to start at 2:15 p.m. ET.]

President Joe Biden will announce on Monday the details of his new student loan forgiveness plan, which could impact tens of millions of Americans.

Immediately after the Supreme Court rejected Biden’s first attempt at wide-scale education debt cancellation, the president said he would seek to forgive the loans another way.

Despite its smaller scope than Biden‘s first education debt relief plan, this new aid package could still lead to at least partial forgiveness for 25 million Americans, the Biden administration said.

More from Personal Finance:
Why gas is so expensive in California
Credit card users face ‘consequences’ from falling behind
After Biden praises progress on inflation, economists weigh in

The plan, if enacted as proposed, would cancel up to $20,000 in unpaid interest for millions of borrowers.

In addition, the program is expected to forgive the debt of certain groups of borrowers, including those who:

  • Are already eligible for debt cancellation under an existing government program but haven’t yet applied
  • Have been in repayment for 20 years or longer on their undergraduate loans, or over 25 years on their graduate loans
  • Attended schools of questionable value
  • Are experiencing financial hardship

The U.S. Department of Education could begin forgiving the debt as soon as this fall.

Student loan forgiveness and the presidential election

Biden wants to make good on his 2020 campaign promise to forgive student debt ahead of the November election.

Almost half of voters in a recent survey, or 48%, said canceling student loan debt is an important issue to them in the 2024 presidential and congressional elections. SocialSphere, a research and consulting firm, polled 3,812 registered voters, including 2,601 Gen Z and millennial respondents, in mid-March.

Forgiving student debt could especially help Biden with young voters, a demographic he’s been struggling with. Around 70% of Gen Z respondents said student debt cancellation was important to them in the election, that same survey found. More than half, or 53%, of respondents in that generation said they or someone in their household has student debt.

The issue is a chance for Biden to differentiate himself from his likely Republican opponent Donald Trump, who has a record of opposing debt relief for students.

While in office, the former president called for the elimination of the popular Public Service Loan Forgiveness program, signed into law by President George W. Bush in 2007. Trump also sided with the Supreme Court in its ruling striking down Biden’s plan.

“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps trillions of dollars, in student loan debt, which would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair,” Trump said at a campaign event in June 2023. 

Articles You May Like

Nvidia shares pass $1,000 for first time on AI-driven sales surge
Average consumer carries $6,218 in credit card debt, as more borrowers are falling behind on their payments
Lowe’s beats on earnings and revenue, even as consumers spend less on DIY projects
Citi fined $79 million by British regulators over fat-finger trading and control errors
The Hottest Stocks to Buy in 2024