President Joe Biden unveiled his third attempt at student loan cancellation with a new rule that would help borrowers who are unlikely ever to be able to repay their loans.
The proposed measure, which was announced Friday, would allow the U.S. Department of Education (DOE) to proactively cancel loans for borrowers if the department determines that the borrowers have an 80 percent chance of being in default on their loans within two years. A loan is typically considered in default if a payment hasn’t been made in roughly nine months.
Other borrowers could apply for a review to determine if they meet the criteria for loan forgiveness. The DOE estimates roughly 8 million Americans would qualify for this new rule.
The measure will enter a 30-day public comment period before it could become official. Biden’s administration said it plans to finalize the new rule in 2025.
The administration said it has the authority to implement this new rule under the Higher Education Act, which allows the education secretary to waive debt in certain cases. It also mentioned that other federal agencies often waive debts owed to them when considering factors like
Joe Biden Unveils Third Attempt at Student Loan Cancellation
