Biden administration inches toward new student debt cancellation policy

Inching closer to delivering on a Plan B for federal student loan borrowers after President Joe Biden's sweeping debt cancellation plan was rejected by the Supreme Court last summer, the Department of Education has announced a broad proposal that would cancel loans for borrowers dealing with «financial hardship.»

Through the new approach, which is a lesser-known, monthslong administrative process that is far less splashy than Biden's initial attempt to cancel $10,000-20,000 in debt for every borrower making below $125,000, the administration is continuing to pursue other pathways that they believe are within the department's legal authority.

«When the Supreme Court struck down President Biden's boldest debt relief plan, within hours, we announced a new rulemaking process designed to provide borrowers relief under the Higher Education Act,» Department of Education Secretary Miguel Cardona said on a call with reporters on Thursday morning.

«The proposal we're releasing today outlines a few new ways to help borrowers who are struggling to make payments on their loans,» he said.

The administration hopes this more bureaucratic approach will not be overturned by the court yet again — though borrowers should be cognizant that it is almost certain to face lawsuits once it reaches its final stages.

Officials declined to give specific details on exactly how many people or who, specifically, could qualify for this new pathway to debt relief because the rulemaking process is still underway and likely will continue through at least the summer — but also because, officials said, they were purposefully trying to work around the «limits of the law and the court decision» that struck down the previous loan cancellation program as too broad.

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