
President Joe Biden delivers remarks on student loan cancellation on February 21, 2024 in Culver City, California.
Mario Tama | Getty Images news | Getty Images
A more targeted amnesty program
This time, the Biden administration has limited its aid by targeting specific groups of borrowers. He hopes the move will help the new project avoid legal challenges.
“I think it would be easier to justify to a court that is skeptical about broad powers.” Luke Herrin, assistant professor of law at the University of Alabama, said in an earlier interview with CNBC.
If the program continues, millions of borrowers could benefit.
The plan will waive debt for borrowers who:
- Already eligible for debt cancellation under the current government program but have not yet applied.
- Have been in payment for 20 years or more on your undergraduate loans, or 25 years or more on your graduate loans
- Attended schools of questionable value.
- Financial difficulties are faced.
The Biden administration said it was not yet entirely clear how financial hardship would be defined, but it could include the burden of medical debt or high child care costs.
The new plan also calls for borrowers to receive up to $20,000 in unpaid interest on their federal student loan forgiveness regardless of their income.
For critics, deja vu
For critics of sweeping student loan forgiveness, Biden’s new plan looks a lot like his first.
After Biden touted his revised aid program, Missouri Attorney General Andrew Bailey, a Republican, Written on x that the president is “shamelessly trying to eclipse the Constitution.”
“See you in court,” Bailey wrote.
Missouri was one of six Republican-led states — along with Arkansas, Iowa, Kansas, Nebraska and South Carolina — to file suit against Biden’s latest debt relief effort.
Red states argued that the president overstepped his authority, and that debt cancellation would hurt creditors’ bottom lines. Conservative justices agreed with him.
Higher education expert Mark Kantrowitz said more legal challenges are inevitable once the Biden administration formally releases its new student loan forgiveness plan.
Kantrowitz added, “The lawsuits will probably go on in a few days.