Student loan forgiveness updates? Yes, but it’s nuanced and won’t take effect for a while, if it even takes effect at all.
Tom: President Biden laid out new plans attempting to cancel student debt for some borrowers on Monday. His prior effort was struck down by the Supreme Court last summer, so now with the election looming, he’s trying again.
His new plan targets five categories:
- Balance reductions for about 25 million borrowers whose debt grew because of unpaid interest. The plan would wipe out up to $20,000 in interest-related debt for all borrowers.
- People who already qualify for student loan forgiveness under existing programs but have not applied.
- People who’ve been paying for at least 20 years on undergrad degrees or 25 years on graduate degrees.
- People who enrolled in schools that “failed to provide sufficient value.” However, the outline released Monday offered no details on how eligibility would be determined.
- People experiencing financial hardship.
When will it take effect? According to the White House, officials hope some of the provisions will go into effect in “early fall.” In the meantime, check studentaid.gov for updates.
