Oct 31, 2023 - Economy

Biden administration unveils new student loan relief proposal

Joe Biden speaks at a lectern with hands raised. In the background, a sign reads "Supporting educators. Supporting students."

President Biden speaks during a National Education Association event in the Eisenhower Executive Office Building in Washington, D.C. on July 4. Photo: Ting Shen/Getty Images

President Biden's administration has released a new proposal for student loan relief that prioritizes borrowers experiencing financial hardship.

Why it matters: After the Supreme Court struck down Biden's signature student debt relief plan in June, the administration has worked to find additional ways to deliver promised relief to millions of borrowers.

  • "We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education," Education Secretary Miguel Cardona said in a release about the proposal Monday.

Details: The plan, if approved following an administrative process, would provide relief to:

  • Borrowers who have outstanding federal student loan balances exceeding what they originally borrowed.
  • Those with student loans that entered repayment 25 or more years ago.
  • Borrowers who took on debt to attend career-training programs that created unreasonable debt loads or provided insufficient earnings, as well as those who attended institutions with "unacceptably high" student loan default rates, per the release.
  • Borrowers deemed eligible for forgiveness through income-driven repayment or other targeted relief programs who have not applied for the relief.

The big picture: Student loan payments resumed in October after a years-long pause during the COVID-19 pandemic.

  • Tens of millions of borrowers collectively owed more than $1 trillion in student loans at the time.
  • The Biden administration had forgiven $127 billion in debt for about 3.6 million Americans as of early October.

Go deeper: Education Department penalizes student loan servicer after billing issues

Go deeper