Under Biden’s new plan, it is currently unclear whether student-loan borrowers will be relieved of their debts.
Biden’s Announcement For ‘Plan B’ for Student Loan Forgiveness
As the Supreme Court took down President Biden‘s first student loan forgiveness plan last week. The president promised to formulate another plan around the Supreme Court’s decision. Biden’s first plan involved the HEROES Act of 2003. The HEROES Act would allow the Education Secretary to compromise the balances of student loans during or in relation to a national emergency, the COVID-19 pandemic is an example.
Shortly after announcing that he would formulate another student loan forgiveness plan, Biden’s new plan would involve the Higher Education Act of 1965. Unlike the first one, Biden’s new plan through this bill would not require a national emergency to be taken into effect.
Miguel Cardona, the Secretary of Education, announced that under Biden’s new plan through the Higher Education Act, the Education Department can waive anything related to federal student debt. Cardona also added that formulating Biden’s new plan would involve lots of hearings and comments from the public.
All About Biden’s New Plan
With the new standards implemented around the Higher Education Act, Biden’s new plan does not guarantee debt relief for everyone. Unlike using the HEROES Act, some borrowers may not be qualified under Biden’s new plan. At present, it is currently unclear whether the same borrowers under the HEROES Act will be eligible under the Higher Education Act.
As Insider reported before, Biden’s new plan under the Higher Education Act could take several months before getting approved. Since student-loan borrowers are set to resume their payments this coming October, Cardona implemented a one-year “on-ramp” period to aid some borrowers in the resumption of payments. The Education Department also implemented its repayment plan, making the payments cheaper for borrowers.