President Biden will announce a new effort Monday to reduce or eliminate student loan debt for millions of borrowers, an election-year effort to revive his goal of providing large-scale relief to Americans struggling to repay their college loans. . the plan said Friday.
Mr. Biden is expected to see the new Education Department regulations that target millions of borrowers, including those whose loans have grown because of accrued interest and others who can demonstrate financial hardship prevents repayment, according to the person who spoke under the condition of anonymity. because the arrangements have not yet been formally proposed by the department.
The proposed regulations are due to be published in the coming weeks. Mr. Biden will talk about the effort during a visit to Wisconsin on Monday, which will coincide with an event on student loans with Vice President Kamala Harris in Philadelphia.
The push is an acknowledgment by Mr. Biden and his allies of the frustration felt by his supporters — especially young voters — when the president’s first effort to eliminate student debt was blocked by the Supreme Court last summer. The court said the government exceeded its powers under federal law when it tried to cancel up to $400 billion in student loans.
Since then, the Biden administration has used existing laws to offer debt relief to smaller pockets of borrowers. Monday’s announcement is expected to eventually reach a larger group, though officials said it would still be more targeted than the blanket relief the Supreme Court has already struck down.
Once the proposed regulations are officially published in the Federal Register, it will still be months before they go into effect due to the required public comment period. Biden administration officials expect the new rules are likely to be challenged in court, which could further delay any debt reductions.
Officials said they believe the new proposed regulations will be more likely to survive legal challenges because they are based on a different federal law and are more targeted at people in specific situations. The president’s previous effort relied on the Heroes Act, which allows the education secretary to waive debt in an emergency. the applicable regulations will be approved by the Higher Education Act.
Politically, the timing is critical for Mr. Biden as he battles former President Donald J. Trump for another term in the White House.
The president’s popularity among young people, a group that was critical to his victory in 2020, has declined significantly over the past several years. A December poll conducted by The New York Times and Siena College found Mr. Biden trailing Mr. Trump among voters 18 to 29, a dramatic margin. In 2020, Mr. Biden won this group by 20 percentage points.
White House and Education Department officials declined to comment on the expected regulations, which were reported earlier by the Wall Street Journal.
However, the details of the proposed rules have been discussed and debated for months in a series of public hearings with stakeholders. Transcripts of these meetings and drafts of the proposed regulations provide a roadmap for the administration’s announcement.
On Feb. 22, the department released a draft regulation titled “Forgiveness Due to Possible Impairment of Borrower’s Ability to Repay or Unreasonable Collection Costs.”
Proposed language in the regulation said the U.S. Secretary of Education could waive student debt when it is determined that “a borrower has experienced or is experiencing hardship associated with such loan, such that the hardship is likely to impair his or her ability borrower to fully repay the federal government or the cost of enforcing the full amount of the debt is not justified by the expected benefits of continued collection of the entire debt.”
That regulation listed 17 factors to consider when evaluating whether a borrower qualifies for the hardship waiver. These include: household income and assets, student loan balance, total loan balance, age, disability, high cost burdens for essential expenses such as health care and “any other indicators of hardship identified by the secretary.”
On Dec. 11, discussions about potential new regulations included a proposal to allow the education secretary to write off student debt when the total amount owed by a borrower exceeds the original loan principal due to accrued interest.
“The Secretary may waive the lesser of $20,000 or the amount by which a borrower’s loans cumulatively have an aggregate balance in excess of the principal amount of the loans,” said proposed text for the regulation distributed at the meeting.
The actual regulations released are likely to differ, at least slightly, from those discussed at the public meetings, the person familiar with the discussions said. But Mr. Biden is expected to embrace help for those facing financial hardship and those with high balances due to accumulated interest.
