The Biden administration on Friday released its latest effort to help borrowers find relief from student debt days before repayments resume for millions, the Education Department announced—an approach that it said will target those most in need of support.
The new plan will focus on borrowers whose debt has soared to become more than the original loan, students with long-term repayment debt and those whose education failed to offer adequate financial value. Also in consideration are Americans who qualify for current debt relief plans but have yet to apply for them and a group that may be suffering hardship but is struggling to find relief in the current loan system.
"The Biden-Harris Administration has taken unprecedented action to fix the broken student loan system and deliver record amounts of student debt relief," Education Secretary Miguel Cardona said in a statement shared with Newsweek. "Now, we are diligently moving through the regulatory process to advance debt relief for even more borrowers. Today, after considering more than 26,000 public comments on how to tailor this relief, we are releasing this additional information about this effort. "
The news comes as student debt repayments are set to resume in October. Interest rates on the loans restarted at the beginning of September, following a pause over the last three years as part of efforts to give Americans relief during the COVID-induced economic crisis.
President Joe Biden's initial plan to cancel student debt of up to $20,000 was struck down by the Supreme Court in June. The announcement from the Department of Education is the latest move by the administration to find ways to give relief to student borrowers.
Learn more: Student Loan Forgiveness Updates and FAQs: Who Qualifies and How To Apply
The administration has approved $177 billion in support for 3.4 million borrowers, the Education Department said. In August, the White House announced the SAVE plan that focuses on the incomes and family size of those who have student debt. The goal was to reduce the amount borrowers have to pay and get them to a point of debt forgiveness quicker.
On Friday, the Education Department said a newly formed Student Loan Relief Committee will meet on October 10 and 11 to discuss the new proposals. The group consists of those who would be impacted by the policy and an official from the department. The discussions will help shape the final regulations of the plan. There will be two other meetings of the committee in November and December.
Members of civil rights organizations, student groups, higher education representatives and state officials will also be part of the committee.
"The public will have an opportunity to submit written comments on the draft rules when they are published next year," the Education Department said in a statement.
The administration is using rules from the Housing Education Act to chart a path forward on the plans.
More than 43 million Americans owe a total of $1.65 trillion in federal student loans. An average borrower has a debt balance of up to $40,000, including debt from private sources, according to the Education Data Initiative.
Update 9/29/23, 12:46 p.m. ET: This story was updated with additional information.
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