Important facts about Biden's latest student loan cancellation initiative

The Biden Administration is exploring alternative options to cancel student loans for millions of Americans after its initial plan was rejected by the Supreme Court. One potential option being considered is the use of the Higher Education Act, a 1965 law that could potentially allow for student loan forgiveness. To better understand the scope of the law and the authority it grants to the education secretary, the administration is convening a committee of 14 individuals from various education sectors to participate in three hearings.

During these hearings, stakeholders such as state officials, loan services, and representatives from colleges will discuss whether any rules need to be changed or added to enable the education secretary to cancel student loans under the Higher Education Act. The Department of Education has posed specific questions to the participants, including how to assist borrowers whose interest has exceeded their initial loan amount and how to better support eligible borrowers who have not applied for income-driven repayment programs.

It remains unclear how much debt could potentially be forgiven or who would qualify under this option. The committee will reconvene for two-day sessions in November and December to negotiate and potentially agree on a proposal. If an agreement is reached, the Department of Education can move forward with the proposal. If not, the department can propose its own plan.

The Biden Administration's initial plan to forgive up to $20,000 in student debt for millions of people was struck down by the Supreme Court, which stated that the education secretary has the power to make only modest adjustments and additions to existing provisions, not transform them. Since taking office, President Biden has forgiven $127 billion in debt for nearly 3.6 million people, but this is just a fraction of the more than $1.7 trillion in federal student loan debt held by Americans.

While widespread student loan forgiveness has yet to be implemented, smaller groups have received forgiveness in recent months. For example, students who enrolled at the University of Phoenix between 2012 and 2014 were granted $37 million in loan forgiveness, and more than 50,000 public employees received $5.2 billion in loan forgiveness under public service loan forgiveness programs.

As the committee continues its hearings and negotiations, the Biden Administration remains committed to exploring multiple avenues for student loan forgiveness, recognizing that each proposal carries the potential for legal challenges.


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