Student-Loan Borrowers Could Receive Up to $20,000 in Debt Cancellation Under Biden’s Plan

A Contentious End to Negotiations for Biden's Debt Relief Plan

The negotiation session for President Joe Biden's second attempt at student-loan forgiveness concluded on December 12, leaving some key issues unresolved. The Education Department's proposals, including a cap on relief and the exclusion of borrowers experiencing hardship, were met with disagreement from the negotiators. Despite the setback, there is hope that the final plan will include provisions for borrowers facing financial difficulties.

The Process of Crafting Biden's Student-Debt Relief Plan

Since October, the Education Department has been working with a group of negotiators to gather input on the shape of student-debt relief under the Higher Education Act of 1965. After the Supreme Court rejected Biden's initial debt relief plan in June, the Education Department embarked on a new route by undergoing a process known as negotiated rulemaking. This process involves a series of negotiation sessions with stakeholders to create a draft text that will later be open to public comment. The negotiations concluded on December 12 after six days of sessions, but a consensus on all relief provisions could not be reached.

Disappointment Over Relief Limits

One of the negotiators, Jessica Ranucci, expressed disappointment over the relief limits proposed by the Education Department. She emphasized that the Supreme Court's decision did not foreclose the possibility of broader debt cancellation. While negotiators requested an additional session to discuss relief for borrowers facing hardship, the department has not yet indicated whether it will oblige. However, a spokesperson for the Biden-Harris Administration reiterated their commitment to providing relief for as many borrowers as possible.

The Current Status of Relief

The Education Department's proposals focus on five groups of borrowers who would be eligible for relief. These include borrowers on income-driven repayment plans with balances greater than their original loan amount, borrowers with balances exceeding what they originally borrowed, borrowers whose loans entered repayment at least 20 years ago, borrowers eligible for relief under targeted loan forgiveness and repayment programs, and those who attended schools that left them with unaffordable debt compared to their post-graduation earnings. However, many negotiators disagreed with the proposed $20,000 cap on forgiveness, arguing that it does not go far enough to address the significant debt burdens faced by many borrowers.

Calls for Broader Relief

While some progress has been made in reaching consensus on relief provisions, experts and lawmakers are pushing for even more comprehensive relief. A group of Democratic lawmakers, including Sen. Elizabeth Warren and Rep. Ayanna Pressley, sent a letter to Education Secretary Miguel Cardona urging him to consider removing the $20,000 cap for borrowers with balances exceeding the principal amount. They believe that President Biden's objective of providing relief to as many borrowers as possible requires further improvement of the draft regulatory text. It is hoped that the Education Department will take these calls for broader relief into consideration, particularly for borrowers experiencing financial hardship.

In conclusion, while negotiations for Biden's student-debt relief plan have concluded, there are still unresolved issues and disagreements among the negotiators. The final plan is expected to provide up to $20,000 in debt cancellation for eligible borrowers, but there is a push for even more comprehensive relief. The Education Department has yet to announce whether an additional session will be held to address relief for borrowers facing hardship. As discussions continue, the goal remains to provide relief to as many borrowers as possible and improve the draft regulatory text to meet President Biden's objectives.—————————————————————————————————————————————
By: asheffey@businessinsider.com (Ayelet Sheffey)
Title: Student-Loan Borrowers Could Receive Up to $20,000 in Debt Cancellation Under Biden’s Plan
Sourced From: www.businessinsider.com/which-student-loan-borrowers-will-get-debt-cancellation-biden-hardship-2023-12
Published Date: Tue, 19 Dec 2023 20:15:54 +0000