President Joe Biden is set to address the details of a new comprehensive plan for student loan forgiveness during his visit to Wisconsin on Monday, according to sources familiar with the White House’s plans.
On Monday, Biden will be heading to Madison, a crucial battleground state that is also home to a major university.
Sources indicate that a proposed rule that has the potential to affect a significant number of borrowers is nearing its finalization. Although the White House has not confirmed any specifics at this time, it is evident that progress is being made on this matter.
According to The Wall Street Journal, the most recent proposal was initially reported on Friday.
According to sources, the Supreme Court rejected a comprehensive student loan forgiveness plan last year. However, a new plan is now being considered, which will provide relief to borrowers who meet certain criteria. These criteria may include experiencing financial hardship or having debt that has grown larger than the original borrowed amount due to interest.
The White House is confident in their legal footing this time if a new debt cancellation proposal is challenged, sources said. The distinction of a more targeted approach to debt cancellation plays a role in this confidence.
In recent months, the Department of Education has actively participated in public listening sessions with stakeholders. This approach is regarded as a best practice, serving as a means to solidify justification and support for new regulations.
In June 2023, the Biden administration’s initial loan forgiveness plan was struck down by the Supreme Court. The Department of Education was deemed to have exceeded its authority by attempting to eliminate over $400 billion in federal student loan debt. The court’s 6-3 decision solidified this ruling.
The program would have forgiven up to $10,000 in debt for borrowers earning less than $125,000 a year. Borrowers who used Pell Grants to finance their college education could have had up to $20,000 of their debt canceled.
Before legal challenges forced the Education Department to halt the program, applications for 16 million borrowers had already been approved. A staggering 43 million Americans were eligible for the program.
In response to the ruling, Biden emphasized that the battle to address student loan debt is far from over.
