President Biden’s Department of Education is working toward implementing a new federal rule that would offer additional student loan forgiveness to 8 million borrowers facing financial difficulties. The rule, if finalized, would allow for one-time student debt forgiveness for individuals deemed to have an 80% chance of defaulting on their loans based on a predictive assessment using existing borrower data. This relief would also be available to “future borrowers” who can demonstrate hardship through a holistic assessment.
Negotiated rulemaking for higher education between 2023 and 2024 began last year, with discussions on this latest rule taking place in committee as early as November 2023. The rule was officially proposed on Oct. 31 and is currently in a public notice and comment period set to end on Dec. 2.
U.S. Secretary of Education Miguel Cardona expressed the need for reform, stating that the current student loan system has made it difficult for borrowers experiencing financial hardships to access relief. The proposed rules aim to provide hope to struggling Americans who may qualify for student debt forgiveness.
Despite previous attempts by President Biden to eliminate student debt being rejected by the courts, his administration continues to pursue avenues to address the issue. In 2023, Biden introduced the “SAVE” plan, which aimed to reduce borrowers’ debt based on economic circumstances but was ultimately struck down by the Supreme Court due to limitations on executive authority.
President-elect Trump has criticized Biden’s efforts to address student debt, referring to them as a “total catastrophe.” Trump highlighted the court’s rejection of Biden’s proposals during a debate with Vice President Kamala Harris in September, indicating a lack of approval for the initiatives.
The White House has not provided a formal response to these criticisms. The ongoing debate surrounding student loan forgiveness underscores the challenges and complexities associated with addressing the burden of student debt in the United States.
