President Joe Biden speaks about his economic plan at the Flex LTD manufacturing plant on July 6, 2023 in West Columbia, South Carolina.
Sean Rayford | Getty Images
The Biden administration has released its proposal for which struggling borrowers should qualify for its new student loan forgiveness plan.
The Supreme Court’s conservative majority blocked President Joe Biden’s first aid package last year. In an effort to create a loan forgiveness program that is legally viable, the Biden administration is working to narrow the relief by focusing on certain groups of borrowers, including those with balances greater than what they originally borrowed and students from schools of questionable quality.
Its new proposal concerns borrowers experiencing financial hardship, the category that has remained the most vague.
The U.S. Department of Education outlined on Thursday a set of factors that could identify struggling borrowers, such as those with student loan balances and required payments that are unreasonable relative to their household income, and people with high child-care and health-care expenses. It also said that financial hardship could be based on other debt obligations, disability, or age, among other factors.
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“The ideas we are outlining today will allow us to help struggling borrowers who are experiencing hardships in their lives, and they are part of President Biden’s overall plan to give breathing room to as many student loan borrowers as possible,” Department of Education Undersecretary James Kvaal said in a statement.
At one point, it seemed possible that the “financial hardship” category had been dropped from what has become known as Biden’s Plan B for student loan forgiveness. While Biden first attempted to cancel student debt through an executive order, he has now turned to the rulemaking…
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