Biden administration releases draft text of student loan forgiveness plan. Here’s what borrowers need to know

The
Biden
administration
on
Tuesday
released
the

draft
text
of
its
new
student
loan
forgiveness
proposal,
which
could

reduce
or
eliminate
the
balances
of
millions
of
borrowers.

The
proposed
rules
should
be
formally
published
in
the
Federal
Register
on
Wednesday
and
will
be
followed
by
a
30-day
comment
period.

“Today’s
announcement
shows
that
the
Biden-Harris
Administration
is
continuing
to
fulfill
our
promises
to
fix
a
broken
higher
education
system,”
said
U.S.
Secretary
of
Education
Miguel
Cardona
in
a
statement.

The
regulatory
text
comes
about
a
week
after
President

Joe
Biden
revealed
the

details
of
his
Plan
B
for
student
loan
forgiveness.

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The
administration
has
been
working
on
that
do-over
since
the
U.S.
Supreme
Court
rejected
Biden’s
first
attempt
at
loan
cancellation
last
summer.

After
the
U.S.
Department
of
Education
reviews
comments
from
the
public,
it
hopes
to
finalize
the
new
rules
and
start
canceling
borrowers’
debts
in
the
fall,
it
said.

At
an
April
8
event
in
Madison,
Wisconsin,
Biden
said
his
new
relief
plan
targets
specific
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
Biden
administration
also
said
that,
if
its
new
plan
is
enacted
as
proposed,
borrowers
will
get
up
to

$20,000
of
unpaid
interest
on
their
federal
student
debt
forgiven,
regardless
of
their
income.

The
draft
text
echoes
much
of
that
announcement.
However,
the
Education
Department
left
out
from
its
relief
plan,
for
now,
the
group
of
borrowers
experiencing
financial
hardship.

The
department
said
it
will
release
a
second
draft
rule
concerning
people
in
this
situation “in
the
coming
months.”

This
is
breaking
news.
Please
check
back
for
updates.