The latest debt forgiveness initiative comes just a year after the Supreme Court will block Biden's previous attempt to help student borrowers. In June 2023, the court denied up to $20,000 in forgiveness to approximately 40,000,000 Americans. Now, The new plan, designed under a different strategy, seeks to overcome legal obstacles that prevented the success of the previous plan.
The key to the new plan lies in the Higher Education Lawwhich gives the Secretary of Education the authority to “compromise, waive or release” federal student loans, according to Telemundo. This time, the Biden administration is using this legislation as the basis for its debt relief program.
Opponents expected to file lawsuits against Biden initiative, arguing that mass student loan forgiveness must be approved by Congress. Despite the potential obstacles, for millions of Americans burdened by student debt, this new proposal could represent a ray of financial hope.
Who is eligible for student debt forgiveness under the new plan in the United States?
The program is aimed at several groups of borrowers:
- Borrowers in financial difficulties: Those who are experiencing difficulties that affect their ability to repay their loans may qualify for forgiveness.
- Long-time borrowers: Borrowers who have been in repayment for more than 20 years may be eligible, especially those who began repaying their loans before July 1, 2005. This threshold is reduced to 25 years for borrowers with post-graduate debt.
- Borrowers affected by accrued interest: About 25,000,000 borrowers whose balances have increased due to “negative amortization” could benefit. These individuals could see up to $20,000 of their interest written off.
- Those who attended programs of low financial value: Borrowers who attended college programs that lost their eligibility to participate in the federal aid program or were denied recertification due to dishonest practices could qualify for forgiveness.
- Borrowers who qualify but have not applied: The plan also seeks to help approximately 2,000,000 low- and middle-income borrowers who qualify for loan forgiveness programs, such as the Public Service Loan Forgiveness Plan or income-based repayment plans, but who have not yet They have requested condonation.
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