(NewsNation) — President Joe Biden announced a new plan for student debt relief Monday that would increase the number of borrowers eligible for relief to more than 30 million, following the defeat of an earlier plan.
Speaking in Wisconsin Monday, Biden touted the plan, saying this kind of relief can be “life-changing.”
“…By freeing millions of Americans from this crushing debt of student debt, it means they can finally get on with their lives, instead of their lives being put on hold,” Biden said.
He noted that even if people work hard to pay off their student loan, debt can still increase.
“Too many people feel the strain and stress, wondering if they can get married, have their first child, start a family, because even if they get by, they still have this crushing, crushing debt,” Biden said.
With the new assistance, Biden said he wanted to “give everybody a fair shot” and the “freedom to chase their dreams.”
The new plan uses the Higher Education Act to forgive student debt after the Supreme Court ruled a previous plan overstepped the president’s executive authority. Since the court ruling, the administration has used existing programs to chip away at student loan debt on a smaller scale.
The Biden-Harris administration proposes waivers that would cancel up to $20,000 of unpaid interest for borrowers who owe more than they originally borrowed due to accrued interest regardless of income.
Low and middle-income people enrolled in the administration’s SAVE plan or other income-driven repayment plan would be eligible for the entire amount their balance has grown since beginning repayment, including single borrowers who earn $120,000 or less or married couples earning $240,000 or less.
No application would be needed for forgiveness. The administration announced a plan to automatically discharge debt for borrowers otherwise eligible for loan forgiveness under other programs who have not enrolled.
The plan would also eliminate student debt for those who have been paying their loans for 20 years or more, including undergraduate and graduate debt.
Loan debt would also be forgiven for those who attended schools or programs that closed or which were denied eligibility for the Federal student aid program or denied recertification because of cheating or taking advantage of students.
The plan would also waive student debt for those whose financial hardship prevents them from paying off their loans. Some borrowers who are predicted to be likely to default on loans could automatically have them forgiven while others could apply with information about hardships like the cost of child care or medical expenses that keep them from making payments.
The administration’s previous effort to forgive student loans would have affected a wider range of borrowers, but it was struck down by the Supreme Court after a lawsuit from Republican governors of several states argued their states would be financially harmed by the plan.
Republicans have criticized student loan forgiveness efforts and attempted to block them, saying Biden overstepped his authority and that forgiveness is unfair to those without student loans.
While there could be new legal challenges on the horizon for this latest program, the White House is hoping to avoid that by making it more narrow and targeting specific groups of borrowers.
“President Biden will use every tool available to cancel student loan debt for as many borrowers as possible, no matter how many times Republican elected officials try to stand in his way,” White House press secretary Karine Jean-Pierre said in a call with reporters.
The Associated Press contributed to this report.