The Biden administration on Friday advanced a more narrowly focused proposal for student loan forgiveness, using a different process than the broader plan that the Supreme Court overturned in June.
Under the new initiative, the administration will proceed with so-called negotiated rule making under the authority of the Higher Education Act. The Education Department will solicit feedback on its proposal throughout the coming months.
Questions released by the department indicate whom the agency might focus on with this round of relief. On the list are borrowers whose balances exceed what they originally borrowed, those whose loans first entered repayment decades ago, people who attended programs that didn’t provide sufficient financial value, those who are eligible for income-driven repayment plans but haven’t applied, and individuals whose financial hardship hasn’t been adequately addressed by the student-loan system.
This represents a narrower population than the original proposal, which would have been open to all federal student-loan holders with an income under $125,000.
The new plan remains vulnerable to legal challenges, says Mark Kantrowitz, a student-loan expert and author of How to Apply for More College Financial Aid. If finalized, the new initiative may not take effect until 2025 under the standard timeline for rule making, he says.
Meanwhile, federal student loan payments are set to resume in October after a pandemic pause of 3½ years. This deadline remains unchanged despite the looming government shutdown.
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