President Joe Biden’s alternative plan for widespread student debt relief has moved a step closer to realization. Following extensive discussions on Thursday and Friday, a consortium of former students, advocates, and experts approved an Education Department proposal that could provide loan forgiveness for a broad spectrum of struggling borrowers.
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Joe Biden
This development occurred in the same week that Biden pardoned over $1 billion in loans for another group of borrowers, eliciting criticism from conservatives in Washington who accused him of attempting to “buy votes.” The president remains committed to pursuing debt cancellation through various avenues.
Tamy Abernathy, a policy coordinator for the Education Department, expressed hope during the week’s discussions, stating, “We are hopeful that you can see that our best effort has been put forth.”
The approved plan, formulated on Friday, ensures automatic relief for borrowers facing economic hardship, granting significant authority to the U.S. education secretary in determining eligibility. The secretary can consider various factors, including income, age, and the likelihood of loan default, in making these decisions.
This regulation is a response to the Supreme Court’s rejection last year of the Biden administration’s initial proposal for widespread student loan forgiveness. Following that ruling, the president pledged to explore an alternative route, navigating bureaucratic processes in pursuit of a similar objective.
The administration has been engaged in discussions since July, employing a bureaucratic process involving amendments to federal higher education law to seek relief. However, the December meeting left many panel members dissatisfied, believing that the administration’s ideas were too narrow and excluded a significant number of borrowers with overwhelming debt and limited means to repay.
Under pressure from Democratic lawmakers and loan relief advocates, the talks were extended in January. Two weeks later, officials introduced the new student debt relief formula, which critics labeled as a “magical model” that grants excessive power to the federal government.
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