Biden-Harris announces new student loan installments just months before election [VIDEO]

The Biden-Harris administration recently unveiled plans for student debt relief, with the Department of Education preparing to reach out to tens of millions of Americans about possible relief options.

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According to the Department of Education, people with at least one federal student loan can expect to receive an email with details about relief options.

However, borrowers have until August 30 to decline the aid if they prefer. Finalization of the rules surrounding this relief is expected to take place in the fall.

The Department of Education emphasized that while the email does not guarantee that specific borrowers will be eligible, it is estimated that more than 30 million borrowers could potentially benefit from these proposed rules.

This group includes people who owe more money than they originally borrowed because of accrued interest, a situation described by the Department as “runaway interest.”

One of the proposed rules aims to automatically relieve borrowers of up to $20,000 of the amount by which their loans exceed the initial repayment amount.

In addition, Education Secretary Miguel Cardona could forgive all balance growth if the borrower is enrolled in an income-based repayment plan and meets specific income criteria.

In addition, the Department of Education also anticipates relief for about 2.6 million borrowers who still have outstanding debt from loans originated at least twenty years ago.

Joe Biden praised the initiative in a statement, boasting of the administration's efforts to “cancel the student debt of approximately 30 million Americans” and presenting it as a major step forward. He also highlighted previous actions taken by the administration, such as canceling student debt for nearly 5 million Americans and increasing the maximum Pell grant.

While the relief measures may seem generous, their timing and potential impact are prompting mixed reactions across the political spectrum, with many questioning the motives behind the big announcement.

Below is the full press release from the US Department of Education:

Biden-Harris administration takes next step toward additional debt relief for tens of millions of student loan borrowers this fall

Starting tomorrow, the Department will send an email to borrowers informing them of possible debt relief and giving them an opportunity to opt out.

The Biden-Harris Administration announced today that it will begin the next step in providing student debt relief to tens of millions of borrowers this fall. Starting tomorrow, the U.S. Department of Education (Department) will begin emailing all borrowers with at least one outstanding federal student loan to provide updates on possible student debt relief and to let them know they have until to August 30th to call your administrator and disable it. if they do not want this relief. The rules that would provide this relief have not yet been finalized, and the email does not guarantee that specific borrowers will be eligible. The Department will provide additional information to borrowers after the rules are finalized this fall. These proposed rules build on the Administration's existing work that has approved more than $168 billion in student loan relief for nearly 4.8 million borrowers through various actions. These rules, if finalized as proposed, would bring the total number of borrowers eligible for student debt relief to more than 30 million, including borrowers who have already been approved for debt relief by the Biden-Harris Administration over the last three years.

“Today, the Biden-Harris administration takes another step forward in our push to provide student debt relief to borrowers who have been failed by a broken system,” said US Education Secretary Miguel Cardona. “These latest steps will mark the next milestone in our efforts to help millions of borrowers who have been buried under a mountain of student loan interest or who went into debt to pay for college programs that left them financially worse off, those who have their loans for twenty years or more, and many others.The Biden-Harris administration pledged to deliver student debt relief to as many borrowers as quickly as possible and today, as we approach the end of long rulemaking process, we are one step closer to fulfilling that promise.

In April, the Administration released its first draft of rules proposing to authorize the Secretary of Education to grant student debt relief to tens of millions of borrowers across the country, including those whose balances have grown due to uncontrolled interest and those who entered payment on their loans a long time ago, among others. If these rules are finalized as proposed by the Department, they will authorize the Secretary of Education for partial or total debt relief for the following groups of borrowers:

Borrowers who owe more now than at the start of repayment. Borrowers would be eligible for relief if they have a current balance on certain types of federal student loans that is greater than the balance on that loan when it entered repayment due to runaway interest. The Department estimates that this debt relief would affect nearly 23 million borrowers, most of whom are Pell Grant recipients.
Borrowers who have been paying off for decades. If a borrower with only degree loans has been amortized for more than 20 years (received on or before July 1, 2005), they would be eligible for this reduction. Borrowers with at least one degree loan that has been repaid over 25 years (received before July 1, 2000) would also be eligible.
Borrowers who are otherwise eligible for loan forgiveness but have not yet applied. If a borrower has not successfully enrolled in an Income Driven Repayment (IDR) plan, but could receive immediate forgiveness, they would be eligible for relief. Borrowers who would otherwise be eligible for closed school dismissal or other types of forgiveness opportunities, but who have not successfully applied, would also be eligible for this relief.
Borrowers who enrolled in programs of low financial value. If a borrower attended an institution that did not provide sufficient financial value or that did not meet one of the Department's accountability standards for institutions, those borrowers would also be eligible for debt relief.
If finalized as proposed, these new rules would authorize relief for borrowers across the country who have struggled with the burden of student loan debt. The Department expects that the four proposed forms of relief will be provided to eligible borrowers without requiring any action by the borrowers; no application would be required.

However, if borrowers prefer to waive this debt relief for any reason, they may do so by contacting their servicer by August 30, 2024. Borrowers who opt for this debt relief may not return -to participate and will also be temporarily disabled from the waiver due to enrollment in an IDR plan until the Department can automatically assess their eligibility for this benefit in a few months. In addition, borrowers will be eligible for the proposed relief only if they have entered repayment by the time the Department determines eligibility, after the proposed rules are finalized.

More information for borrowers about this debt relief is available at StudentAid.gov/debt-relief.An Unmatched Track Record of Borrower Assistance

The Biden-Harris administration has taken historic steps to reduce the student debt burden and ensure that student loans are not a barrier to educational and economic opportunity for students and families. The Administration secured a $900 increase to the maximum Pell Grant, the largest increase in a decade, and finalized new rules to help protect borrowers from career programs that leave graduates with unaffordable debt or income insufficient The Administration continues its task of issuing debt relief regulations under the Higher Education Act, with the final regulations expected this fall.

The Biden-Harris administration has approved the following debt relief for borrowers:

• $69.2 billion for 946,000 borrowers through Public Service Loan Forgiveness (PSLF) fixes.
• $51 billion for more than 1 million borrowers through administrative adjustments to IDR payment counts. These adjustments have brought borrowers closer to forgiveness and addressed longstanding concerns about the misuse of forbearance by loan servicers.
• $28.7 billion for more than 1.6 million borrowers who were defrauded by their schools, saw their institutions shuttered hastily or are covered by related court settlements.
• $14.1 billion for more than 548,000 totally and permanently disabled borrowers.
• $5.5 billion for 414,000 borrowers through the SAVE Plan.