What will Biden's new plan mean for borrowers set to begin paying back their student loans?
After the Supreme Court effectively killed President Biden’s student debt forgiveness proposal, he’s trying again using a different legal approach
NEW YORK — Following the Supreme Court's decision to effectively kill Biden’s earlier student debt forgiveness proposal, the White House is trying again to ease the burden on those carrying student loans using a different legal approach.
Biden's original plan would have canceled up to $20,000 in federal student loans for 43 million people. Of those, 20 million would have had their remaining student debt erased completely.
With repayments set to begin in October, many borrowers are wondering if they still have to pay. Here's what to know about where the new Biden plan stands.
WHAT IS THE NEW PLAN AND HOW IS IT DIFFERENT?
Under the proposed approach, the White House is now planning to use the Higher Education Act of 1965 — a sweeping federal law that governs the student loan program — to bring about relief for student borrowers.
Biden said the authority of the act will provide “the best path that remains to provide as many borrowers as possible with debt relief.”
The law includes a provision giving the education secretary authority to “compromise, waive or release” student loans.
In its previous attempt to forgive student loans, Biden's White House appealed to a bipartisan 2003 law dealing with national emergencies, known as the HEROES Act, for the authority to cancel the debt. The court's 6-3 decision, with conservative justices in the majority, said the administration needed Congress’ endorsement before undertaking so costly a program.
WHO WILL BE ELIGIBLE AND HOW MUCH DEBT WILL BE CANCELED?
So far, it remains unclear which loan holders will qualify and how much of their
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