President Joe Biden, who had a student loan forgiveness plan struck down by the Supreme Court last year, is touting another proposal that he says will bring relief for as many as 30 million borrowers.
The president is expected to unveil the new proposal, which CNN first reported on Friday, during a campaign stop in Madison, Wisc., today.
The White House said that Biden’s proposal would wipe out the remaining balances for four million borrowers while eliminating accrued interest for 23 million borrowers. An additional 10 million borrowers will see reductions of $5,000 or more if the proposal is approved by the Department of Education.
"These historic steps reflect President Biden's determination that we cannot allow student debt to leave students worse off than before they went to college," Undersecretary of Education James Kvaal said in a prepared statement.
"The President directed us to complete these programs as quickly as possible, and we are going to do just that."
The White House says the new plan would eliminate or reduce debt for the following borrowers:
• Borrowers who owe more than they did at the start of repayment.
• Borrowers who have been paying down student loans for more than 20 years.
• Borrowers whose loans were used to enroll in “low-financial-value programs.”
• Borrowers who are experiencing “hardship paying back their loans,” which is “undermining their ability to build generational wealth, start businesses, buy homes, and more.”
• Borrowers who are otherwise eligible for Biden’s loan forgiveness initiatives but who have not yet applied.
A senior White House official who asked for anonymity told reporters during a Sunday press call that the president’s goal is for most of the relief to be automatic, so that borrowers do not need to take any action to become eligible. Meanwhile, the administration is still finalizing details for determining hardship relief.
The White House said financial hardship loan forgiveness is designed to benefit "borrowers who are at high risk of defaulting on their student loans, who could be eligible for automatic relief, or families who are burdened with other expenses like medical debt or child care who can apply for relief in the future."
Like Biden’s first attempts to forgive student loans, however, the latest proposal faces an uncertain future in the courts.
The Supreme Court struck down the president’s first attempt at to completely forgive outstanding student loans last year. Following that defeat, the White House pushed through more targeted student loan forgiveness, successfully cancelling more than $154 billion in student debt for four million borrowers.
Just a week ago, GOP state attorneys in 11 states filed a lawsuit against Biden's existing student debt forgiveness plan, citing the Supreme Court’s 6-3 decision to overturn his unilateral forgiveness plan.
Alabama, Alaska, Idaho, Iowa, Kansas, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah are also asking to be repaid for Biden's Saving on a Valuable Education Plan (SAVE) loan forgiveness.
The lawsuit by the GOP coalition sets up a legal battle that could take place in the closing days of President Biden’s presidential rematch against former President Donald Trump.
For Biden, who is within a hair’s breadth of Trump in battleground states in several new polls, the fight to increase student debt forgiveness is considered a key issue in the campaign.
Some 51% of voters polled by the Student Borrower Protection Center (SBPC) after the 2022 midterms said student loan forgiveness was either the only reason they voted or was very or somewhat motivating in their decision to go to the polls. Among voters under age 30, more than three-quarters of all voters surveyed claimed student debt relief was a motivating factor behind their decision to vote.
“President Biden will use every tool available to cancel student loan debt for as many borrowers as possible, no matter how many times Republican elected officials try to stand in his way,” White House press secretary Karine Jean-Pierre said on a call with reporters on Sunday.