Biden unveils another plan to wipe up to $20,000 in student loan debt for up 25 million borrowers… as his bill for forgiveness reaches $153 billion

The Biden administration has officially unveiled new rules it plans to use to wipe out millions in debt for student loan borrowers by tackling rising interest rates.

President Biden first announced his latest proposals to cancel student loan debt during a visit to Madison, Wisconsin, more than a week ago, after his original plan was blocked by the Supreme Court.

In total, the government believes its combined efforts can reduce the debts of more than 30 million borrowers, including the 4.3 million who have already had their debts forgiven.

The new rules to be formally published on Wednesday. The public will then have thirty days to respond to the proposals.

The Department of Education will then finalize rules to begin forgiving debt this fall.

It comes as Republicans have accused President Biden of trying to “buy votes” as he runs for re-election.

Eighteen Republican-led states have already filed suit over another plan the president released, the SAVE plan.

The administration has forgiven $153 billion in student loan debt since Biden took office and expects new rules to forgive billions more.

The Penn Wharton Business Model estimates that the new rules, along with the president’s recent SAVE plan, will cost approximately $559 billion over the next decade.

Protesters gathered outside the Supreme Court when the court blocked President Biden’s previous student loan relief plan last June. Biden has already forgiven $153 billion in student loans, despite the court blocking the first attempt

The first of the established rules focuses on waiving interest for borrowers who now have more debt than when they originally took out loans because of growing interest rates.

It would allow the Department of Education to automatically forgive up to $20,000 in debt for borrowers on the amount they currently owe that exceeds what they owed when they started repaying loans.

It would apply to all types of student loans held by the Department of Education, including parent loans, consolidated loans and loans in arrears.

Another rule would allow the Department of Education to forgive the full amount of the debt. Borrowers saw their balances grow after enrolling in income-driven repayment plans.

To qualify, borrowers must have an annual income of $120,000 or less if they are single, and $240,000 or less if they are married.

The Biden administration estimates that 25 million borrowers now owe more than they originally borrowed due to interest on federal student loans. The new rules would wipe out the entire increase in balances for 23 million borrowers.

The Department of Education also released a draft of the rule addressing debt forgiveness for borrowers who have been making payments for 20 years or more.

It applies to students who started repaying loans on or before July 1, 2005.

Graduate school borrowers can see their debts forgiven after repaying loans for 25 years, or since July 1, 2000.

The government estimates that this one-time move will affect 2.6 million borrowers who have outstanding debts on old loans that have yet to be repaid. But officials are asking the public for feedback on ways to help borrowers who are close but don’t quite meet timeline qualifications.

Other rules that have been put forward include rules for debt forgiveness for borrowers who qualify for other programs but have not yet applied due to paperwork requirements, poor advice or other obstacles.

The Department of Education will release a second rule in the coming months, aimed at providing relief to struggling borrowers.

This week’s moves are the ones that move the Biden administration closer to canceling millions in debt.

Critics of President Biden have condemned the president’s efforts to cancel debt, calling it unfair to Americans who have not taken out loans, gone to college or already repaid their debts.

Republicans have dismissed the effort as shifting the debt rather than eliminating it, saying the effort could help boost the national debt if less money comes in.

But some advocates praised the move Tuesday. The Center for Responsible Lending has advocated eliminating accrued interest.

The group said Tuesday that the rules “guarantee a higher education system that is fairer and more accessible to all.”