Biden announces new plan to cancel student loans for 30m borrowers

Joe Biden announced plans to cancel student loans for 30 million borrowers on Monday, the administration’s latest push on addressing student debt before the presidential election.

The plan primarily targets borrowers who have accrued a high level of interest on their debt and those who have been in repayment for at least 20 years. Borrowers who face extreme economic hardship could also see some relief.

The White House said that parts of the plan could begin to take effect in the early fall, at the earliest. In addition to a waiting period to receive public comment, the administration is expecting legal challenges from Republicans that could stall the plan from going into effect.

Biden touted the new plan in a speech Monday afternoon in Madison, Wisconsin, where he said “too many people feel the strain and stress” of student loans.

“Today, too many Americans, especially young people, are saddled with unsustainable debts in exchange for a college degree,” Biden said. “It’s a drag on our local economy.

“Now, thanks to what we’re doing, that debt is no longer holding you back.

The bulk of borrowers impacted by the plan will be those who owe more than their original balance because of accumulated interest. Borrowers who make under $120,000 a year, or married borrowers who make under $240,000, will automatically receive cancellation for the amount their balance has grown because of interest, up to $20,000. This cancellation will be automatic, and the administration estimates it will impact more than 25 million borrowers.

The plan also targets borrowers who have held their debt for nearly 20 years. Borrowers who started repayment on their undergraduate debt on or before 1 July 2005 or their graduate school debt on or before 1 July