Education Department eyes widespread student debt relief in draft rules

Higher Ed Dive

Natalie Schwartz

April 16, 2024

Dive Brief:

•  The U.S. Department of Education on Tuesday released the first set of draft regulations aiming to provide widespread debt relief to certain groups of student loan borrowers, including those who owe more than their initial balance due to ballooning interest.

• The proposals would also offer relief to borrowers who have been making payments for over two decades and those who would be eligible for loan forgiveness under other agency programs but haven’t enrolled in them. And it would clear debts for borrowers who attended colleges that didn’t provide them with “sufficient financial value,” according to the department.

• The public will have 30 days to comment on the draft rules once they are published in the Federal Register, which is expected on Wednesday. The Education Department also plans to release a separate regulatory proposal in the coming months to provide debt relief to borrowers facing financial hardship.

Dive Insight: 

The draft regulations represent President Joe Biden’s second attempt to carry out widespread loan forgiveness after the U.S. Supreme Court struck down his initial plan last year.

The Biden administration predicts the proposals would eliminate all accrued interest for 23 million borrowers, fully clear student debts for more than 4 million, and provide at least $5,000 in loan forgiveness for over 10 million.

“Today’s announcement shows that the Biden-Harris Administration is continuing to fulfill our promises to fix a broken higher education system,” U.S. Secretary of Education Miguel Cardona said in a statement Tuesday.

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