President Joe Biden announced a new bid on Monday to provide federal student loan debt relief to millions of Americans, part of a patchwork of debt relief plans the administration has been stitching together since the Supreme Court struck down Biden’s biggest swing last summer. The new plan offered up on Monday won’t affect nearly as many people as the original plan — but it’s definitely the best workaround that the White House has come up with yet.
This time around, rather than canceling the loans themselves, the plan aims at forgiving the interest that has accrued, which leaves some borrowers in a deeper and deeper hole. Here’s how NBC News described who will be eligible:
Biden’s new plans are aimed at canceling runaway interest for millions of borrowers; nullifying debt for those who are eligible for but not yet participating in certain forgiveness programs, such as those in public service who’ve been paying off their loans for 10 years or more; borrowers of undergraduate or graduate loans who started paying off loans at least 20 or 25 years ago, respectively; borrowers enrolled in low financial value programs; and those experiencing hardships that prevent them from making loan payments.
The new policy would “fully eliminate accrued interest for 23 million borrowers, cancel the full amount of student debt for over 4 million borrowers, and provide more than 10 million borrowers with at least $5,000 in debt relief or more,” according to a White House fact sheet released Monday. That’s far short of the $400 billion in relief that was expected to wipe out the debt entirely for more than 20 million Americans. But again, it’s still better than nothing.
The focus on interest is a smart pivot for the administration, given the massive resistance that previous attempts to wipe out student debt wholesale has seen. In wiping out accumulated interest, allowing any remaining payments to go directly to the principle, many who have been drowning in debt…
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