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A week after previewing its plans to provide debt relief for 26 million Americans, the Biden administration is taking the next step this week to making it a reality.
Today, the Education Department published the proposed regulations that will enable the debt relief on the Federal Register. The rules are open to public comment for the next 30 days. After that, Department staff must review and respond to every comment before issuing a final rule. Officials say they hope to finalize the rule—and start forgiving debts—this fall.
The Biden plan has been in the works since the summer, when the Supreme Court struck down his first attempt at mass loan forgiveness for 43 million Americans. The new relief plan, which the administration believes will hold up against court challenges, will cost $147 billion over 10 years, according to the proposed regulations.
“Today’s announcement shows that the Biden-Harris Administration is continuing to fulfill our promises to fix a broken higher education system,” Education Secretary Miguel Cardona said in a statement. “Student loan forgiveness isn’t only about relief for today’s borrowers. It’s about social mobility, economic prosperity, and creating [an] America that lives up to its highest ideals.”
The regulations published this week specify the circumstances under which the secretary can waive repayment of a borrower’s loan. Those who will get relief include individuals who owe more than initially borrowed because of interest and those who have been paying back their loans for at least 20 years.
The department is proposing to forgive up to $20,000 in interest for borrowers who have federal student loans. Those who earn less than $120,000 and are enrolled in an income-driven repayment plan—about 23 million Americans—would have their entire interest canceled.
