Biden Moves to Finalize First Set of Alternative Student-Debt Rules
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(Bloomberg) -- President Joe Biden’s administration is moving closer to finalizing its “Plan B” to offer broad relief for student-loan borrowers, a signature initiative with implications for his reelection hopes in November.
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The Education Department will publish a proposed rule on Wednesday offering assistance to ease the debt burden for select categories of borrowers, setting up a 30-day comment period.
The proposal won’t include a financial hardship provision, delaying a key request from progressives. A draft rule dealing with that aspect of the plan is expected to be published in the coming months, the agency said.
Biden has been preparing an alternative since his initial $400 billion student-debt program was struck down by the Supreme Court last year. The new plan is similarly expected to face legal challenges that could drag past the election.
Biden campaigned on offering loan forgiveness in 2020 and the high court ruling sparked frustration among Black, Latino and young voters who the president will need to draw to the polls in his rematch against Donald Trump.
The decision to delay the hardship category, which has been the subject of debate for months, is likely to rankle progressive allies. Progressives have pushed Biden on that measure, which would offer relief to low-income borrowers and young people who may not otherwise qualify for debt forgiveness.
“Younger borrowers who are experiencing or will experience hardship cannot be seen as an afterthought and deserve much-needed relief now,” said policy director Aissa Canchola Banez at the Student Borrower Protection Center.
The measures being published Wednesday in the Federal Register will apply to borrowers who qualify for federal programs but have not been enrolled and those debt exceeds their principal amount. Other beneficiaries would include individuals who have made payments for more than 20 years and students who attended “low-financial-value” programs.
Americans could benefit under more than one category of relief. An estimated 25 million borrowers would have their accrued interest fully or partially eliminated under the action. Additionally, around 2.6 million borrowers who have been in repayment for at least two decades could see relief.
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