Biden proposes student loan debt relief for borrowers ‘highly likely’ to default

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The Biden administration is proposing an ambitious new way to determine which low-income Americans could qualify for student debt relief.

Under the plan rolled out by the Education Department on Thursday, the federal government would consider the life challenges that prevent certain borrowers from making progress on their loans when assessing if a person is eligible for student loan forgiveness.

Whether a borrower has a disability – or other “high-cost burdens for essential expenses,” such as costs related to health care or caring for a loved one – would become bigger factors in the agency’s thinking. Household income, the person's assets and their age would be considered as well.

The Department of Education says the suggested regulation would bring automatic relief for borrowers who are highly likely to be in default in two years, potentially giving forgiveness to hundreds of thousands of those borrowers, at least. Advocates said Thursday the proposal on the whole could pave the way for relief for tens of millions. The White House said it couldn’t immediately identify exactly how many borrowers the proposal could impact altogether.

On a call with reporters on Thursday, Karine Jean-Pierre, the White House press secretary, said the announcement is part of President Joe Biden’s commitment to keep pushing for widespread student loan forgiveness, even after conservatives on the Supreme Court doomed his first far-reaching plan this summer.

“He promised he wasn’t done fighting for student loan borrowers,” Jean-Pierre said.

The announcement follows months of pressure from progressives who've called on the Education Department to be more ambitious in its student loan relief efforts despite the legal hurdles. In statements to USA TODAY, student loan relief advocates praised the administration for heeding their calls.

Read more: Student loan relief talks end without a final answer on who should get help

“Upon enacting this proposal, federal policy will finally recognize what Americans from all walks of life have known for decades – too often, higher education does not deliver on its promise of economic mobility and financial stability, and borrowers and their families should not be sentenced to a lifetime of debt as a result,” said Persis Yu, the deputy executive director at the Student Borrower Protection Center.

Progressive lawmakers also lauded the White House's new announcement, including Sen. Elizabeth Warren, D-Mass.

“This is a meaningful next step in the fight to cancel student debt for many more Americans. Borrowers who are barely making enough to make ends meet deserve relief from our broken student debt system, and we should be making that relief as easy to access as possible,” Warren said.

Read more: Biden administration extends student loan relief talks after mounting pressure

Rep. Virginia Foxx, R-N.C., who chairs the House education committee and has been a chief critic of Biden's student loan policies, derided Thursday's announcement.

“Student debt is skyrocketing, college completion rates are abysmal, and schools have zero accountability for the overpriced degrees they offer," she said in a statement. "Voters don’t want to be bought."

Education Department officials will debate the new plan with federal negotiators during the agency’s final session of its student loan relief talks, which are slated for later next week. USA TODAY first reported the department’s decision to add the final session to specifically discuss relief for borrowers suffering financial hardship.

Zachary Schermele covers education and breaking news for USA TODAY. You can reach him by email at Follow him on X at @ZachSchermele.

This article originally appeared on USA TODAY: Student debt relief proposal from Biden could help burdened borrowers