Biden to Expand Student-Loan Relief Before Term Ends, White House Official Confirms
Student-loan borrowers can anticipate significant debt relief before President Joe Biden’s term concludes, according to White House Chief of Staff Jeff Zients. In a recent interview with Axios, Zients underscored that student-loan forgiveness remains a top priority for the administration as Biden wraps up his final months in office.
Key Points from White House Briefing
- Continued Focus on Student Debt Relief: Zients emphasised that Biden’s administration is committed to advancing student-debt relief initiatives. “You should expect more on student debt relief,” he told Axios, highlighting ongoing efforts to make American lives more affordable.
- Broader Goals for Biden’s Term: Alongside student-loan relief, Biden’s agenda includes implementing the infrastructure bill, safeguarding civil rights, addressing competition with China, and tackling the issue of junk fees.
Current Status of Student-Loan Relief
Over the past few years, student-loan borrowers have seen a mix of progress and setbacks:
- First Attempt Blocked: The Supreme Court blocked Biden’s initial broad student-loan forgiveness plan last summer.
- Second Attempt Underway: The Education Department is now finalising a new plan for broader relief, which is expected to face further legal scrutiny.
Upcoming Relief Measures
Here’s what borrowers can expect as the year draws to a close:
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One-Time Account Adjustments:
- Income-Driven Repayment Plans: The Education Department is updating borrower accounts to reflect accurate payment counts, helping many reach the forgiveness threshold.
- Public Service Loan Forgiveness: Adjustments are aimed at bringing accounts up to date, with completion expected by September 1.
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Broader Forgiveness Plan:
- Implementation Expected in October: The Education Department’s broader relief plan, using the Higher Education Act of 1965, is set to benefit over 30 million borrowers.
- Key Features: This includes debt cancellation for those with unpaid interest, borrowers who have been in repayment for 20 years or more, and those who attended schools that resulted in excessive debt compared to their post-graduation earnings.
Legal Challenges and Uncertainties
Despite these planned relief measures, several factors could complicate their implementation:
- Legal Obstacles: The broader forgiveness plan is likely to face legal challenges that could delay or prevent its rollout.
- SAVE Plan Issues: Biden’s SAVE income-driven repayment plan is also entangled in legal battles. Although some borrowers have benefited from SAVE’s shorter forgiveness timeline, the 8th Circuit Court of Appeals has blocked its implementation, leaving 8 million borrowers in limbo.
What This Means for Borrowers
- Relief Delays: Borrowers should prepare for potential delays due to ongoing legal challenges. The timeline for receiving relief might shift depending on court decisions and administrative processes.
- Current Status: For now, borrowers on forbearance under SAVE are unable to make progress towards forgiveness until the legal injunction is lifted.
Conclusion
As President Biden approaches the end of his term, his administration remains focused on enhancing student-loan relief efforts. Despite ongoing legal hurdles, significant progress is expected in the coming months. The administration’s commitment to addressing student debt underscores a broader goal of making higher education more accessible and affordable for all Americans.
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