The Joe Biden administration has withdrawn two major student loan forgiveness plans, affecting over 30 million borrowers, just weeks before President-re-elect Donald Trump‘s inauguration and White House takeover.
On Friday (December 20), exactly one month before Donald Trump’s inauguration, the Joe Biden administration deserted two massive student loan forgiveness plans that will affect over 30 million borrowers. The move marks an anticlimactic end to Joe Biden and Vice President Kamala Harris‘ longstanding efforts to provide massive student debt relief.
The first plan was commonly referred to as “Plan B,” which followed Biden’s first massive student loan forgiveness plan that would have provided $10,000 in loan forgiveness for most borrowers; however, the Supreme Court rejected that last year.
“Plan B” would have benefited borrowers in four broad groups: those with runaway balances due to interest accrual; those who attended a “low-value” school that failed to comply with federal standards; those who took out student loans more than 20 or 25 years ago; and those who qualify for existing loan forgiveness programs but never applied.
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The second plan, simply known as a hardship-based student loan forgiveness plan, would have provided relief to borrowers who’ve experienced hardship, with identifiers like the borrower’s low income and other debt burdens, eligibility for other means-tested government programs, and disability status.
It’s reported that on Friday, officials within the Joe Biden administration withdrew proposed regulations that would have allowed for initiatives to be implemented. The student loan forgiveness plans would have permitted the Secretary of the U.S. Department of Education (D.O.E.) to cancel student loans for several groups of borrowers.
As mentioned, some of those student loan borrowers included those who took out the following: William D. Ford Federal Direct Loan Program (Direct Loans), the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins) Program, and the Health Education Assistance Loan (HEAL) Program.
The initiatives would have affected those who have been in repayment for decades, plus those who have experienced a seemingly never-ending balance growth due to ever-growing interest. Others who would have benefited from the Joe Biden administration’s student loan forgiveness plans include student loan borrowers with significant personal or financial hardships. If the forgiveness initiatives had been approved and implemented, they would have greatly helped over 30 million student loan borrowers in America.
Furthermore, on Friday, the Education Department posted notices in the Federal Register, noting that it was withdrawing the Joe Biden administration’s student loan forgiveness plans, just weeks before President-re-elect Donald Trump enters the White House. Note: Trump has been a vocal critic of the Joe Biden administration’s student loan forgiveness plans, and initiatives alike in general. On his campaign trail, he called Biden’s efforts “vile” and “not even legal.”
In its notice, the D.O.E. said, “Upon further consideration of the operational challenges in implementing the proposals, the Secretary withdraws the NPRM (notice of proposed rulemaking) and terminates the rulemaking proceeding.” However, the Department of Education said it would “commit its limited operational resources to helping at-risk borrowers return to repayment successfully.”
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The D.O.E. added, “Withdrawing the NPRM will assure agency flexibility in re-examining the issues and exploring options and alternatives with stakeholders in the future. For all of these independently sufficient reasons, the Department is withdrawing this NPRM.”
As mentioned, for now, the Education Department will still offer a wide range of student loan forgiveness plans already enacted, like the Public Service Loan Forgiveness (PSLF) program and Teacher Loan Forgiveness (TLF) program.
PSLF allows certain non-profit and government employees to have their federal student loans cleared after 10 years of on-time payments. TLF allows full-time teachers and those who’ve taught for five consecutive academic years in a low-income school or education service agency to have loans forgiven up to $17,500.
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