President Biden is expected to announce a new initiative Monday to reduce or eliminate student loan debt for millions of borrowers, an extension of the president’s plan to provide massive relief to Americans struggling to repay their college loans. This is an election-year attempt to revive the goal, officials said. The plan was announced Friday.
The person, speaking on condition of anonymity, said Mr. It is expected that the Ministry of Education will conduct a preliminary inspection of new regulations targeting the education sector. This is because the regulation has not yet been formally proposed by the ministry.
Proposed regulations are expected to be published in the coming weeks. Biden is scheduled to visit Wisconsin on Monday to talk about the initiative, which will coincide with an event on student loans with Vice President Kamala Harris in Philadelphia.
The push comes as Biden and his allies echo the disappointment felt by his supporters, especially young voters, when the president’s first attempt to wipe out student debt was blocked by the Supreme Court last summer. This is due to recognition. The court said the government overstepped its authority under federal law by seeking to cancel up to $400 billion in student loans.
Since then, the Biden administration has used existing law to provide debt relief to small borrowers. Monday’s announcement is expected to eventually reach more groups, but officials said it will be more targeted than the blanket relief already struck down by the Supreme Court.
Even if the proposed regulations are officially published in the Federal Register, it will still take several months for them to go into effect because of the required public comment period. Biden administration officials predict the new rules will likely be challenged in court, potentially further delaying debt reduction.
Officials said they believe the new proposed regulations are likely to survive legal challenges because they are based on different federal laws and are more targeted to people in specific situations. The president’s previous efforts were based on the Heroes Act, which allowed the secretary of education to forgive debt in emergencies. Current regulations would be authorized by the Higher Education Act.
Politically, the timing is critical for Biden, who is competing against former President Donald J. Trump for re-election to the White House.
The president’s popularity among young people, who were crucial to his 2020 victory, has declined significantly in recent years. A poll conducted by The New York Times and Siena College in December showed Mr. Biden leading Mr. Trump among 18 to 29 voters, a dramatic reversal. In 2020, Biden won this group by a 20 percentage point margin.
White House and Education Department officials declined to comment on the expected regulations, which were earlier reported by the Wall Street Journal.
However, the details of the proposed rule have been discussed and debated for months in a series of public hearings with stakeholders. The records of these meetings and the draft regulations will serve as a roadmap for the administration’s announcement.
On February 22, the ministry released a draft regulation titled “Exemption on the grounds of reduced repayment ability of the borrower or potential for unreasonable collection costs.”
Proposed language in the proposed regulations states that a determination is made that the “borrower has experienced or is experiencing hardship in connection with such loan, and that hardship may impair the borrower’s ability to repay the loan in full.” The U.S. Secretary of Education has said that student loans can be forgiven if that happens. The burden on the federal government and the costs of enforcing the full amount of the debt are not commensurate with the expected benefits of continuing to collect the full amount of the debt. ”
The regulations list 17 factors to consider when evaluating whether a borrower qualifies for hardship forgiveness. These include household income and assets, student loan balances, total loan balances, age, disability, high costs of necessities such as medical care, and “other indicators of hardship identified by the Secretary.”
On Dec. 11, discussions about possible new regulations included a proposal that would allow the Secretary of Education to forgive student loans if unpaid interest causes the borrower’s total amount to exceed the principal amount of the loan. .
“The Secretary may forgive the lesser of $20,000 or the amount by which the cumulative balance of the borrower’s loans exceeds the principal balance of the loans,” the proposed regulations distributed at the meeting state.
The actual regulations announced are likely to be at least slightly different from those discussed at the public meeting, people familiar with the discussions said. But Mr. Biden is expected to embrace aid for people in financial hardship and those with large balances accumulating interest.
