President Joe Biden has announced a new plan to ease the debt burden for over 30 million college graduates, bringing them “life-changing” relief. This is a significant step towards fulfilling his campaign promise and could potentially boost his standing with young voters.
During a trip to Wisconsin, one of the key battleground states, Biden detailed the initiative that has been in the works for months. He expressed his desire to give everyone a fair chance and the freedom to pursue their dreams, while also acknowledging the rising cost of higher education.
Biden highlighted the struggles faced by college graduates, even after working hard and paying off their student loans. He stated that their debt continues to increase, making it difficult for them to start a family or chase their dreams. This new plan aims to alleviate this financial burden and provide much-needed relief to millions of borrowers.
The President’s trip to Wisconsin comes shortly after the state’s primary voting, which revealed some political weaknesses for Biden as he prepares for the general election. In Dane County, home to the liberal capital of Madison and the University of Wisconsin’s flagship campus, a significant number of Democratic voters chose “uninstructed” instead of Biden. This reflects a growing concern among young voters, and Biden’s new plan could help solidify his coalition and secure their support.
One of the critical issues that have caused a fracture within the coalition is the ongoing conflict in the Middle East. Young voters are more likely to disapprove of Biden’s unwavering support for Israel’s military operation in Gaza, which has resulted in heavy civilian casualties. This has led to impatience among some young voters, who have been waiting for Biden to fulfill his promise of wiping away student loan debt. However, his initial attempt to forgive hundreds of billions of dollars in loans was foiled by the U.S. Supreme Court last year. Biden has called this decision a “mistake.”
Since then, the White House has been working on targeted initiatives to provide debt relief to specific groups, such as public service workers and low-income borrowers. The administration has already canceled $144 billion in student loans for nearly 4 million Americans. However, this new plan aims to expand federal student loan relief to a broader range of borrowers through the Higher Education Act, making it more legally sound than the previous proposal.
The plan is expected to be smaller and more targeted than Biden’s original plan, which would have canceled up to $20,000 in loans for over 40 million borrowers. Under the new plan, more than 30 million Americans could have some or all of their federal student loans canceled. The Education Department plans to issue a formal proposal in the coming months, with the aim to start implementing parts of the plan as early as this fall.
The plan includes five categories of borrowers who would be eligible for loan forgiveness. The first category is for borrowers who have seen their balance increase due to unpaid interest. Under this category, up to $20,000 in interest could be canceled for borrowers enrolled in an income-driven repayment plan and earning less than $120,000 annually or couples earning less than $240,000. This could provide relief to an estimated 25 million borrowers, with 23 million having all their interest erased.
The second category includes 2 million borrowers who are eligible for loan forgiveness but have not applied for other programs, such as Public Service Loan Forgiveness. The third category is for those who have been repaying their undergraduate loans for at least 20 years or graduate school loans for 25 years, who would be eligible to have their remaining debt canceled.
The fourth category is for borrowers who were in college programs that were later deemed to have low financial value, making them eligible for loan forgiveness. Lastly, the fifth category is for borrowers facing hardships that prevent them from repaying their loans, such as a high risk of default or significant medical or childcare expenses.
Education Secretary Miguel Cardona stated that this new plan, along with the $146 billion in student loan debt relief already provided to 4 million Americans, makes it the most significant debt relief effort in the country’s history.
The plan has received criticism from Republicans, who believe it shifts the financial burden of college tuition onto taxpayers who did not take out loans. However, the Biden administration remains committed to providing relief to borrowers and believes this plan will help address the high cost of education.
Biden’s announcement was made in Madison, the state’s liberal capital, and home to the University of Wisconsin’s flagship campus. This is
