President Joe Biden unveiled a proposal to cancel or reduce student loan debt for as many as 30 million borrowers just months before the 2024 general election.
The president’s first attempt at unilateral action on student loans was struck down by the Supreme Court in the summer of 2023, yet the White House has taken additional steps in the subsequent months. As of Monday, the Biden administration has successfully canceled billions in loan debt for more than 4 million borrowers.
A coalition of Republican-led states has challenged his actions in court, setting up another legal showdown that has direct implications for Biden’s reelection campaign as he attempts to court voting blocs including younger voters.
The White House said this new proposal would “provide financial stability” for roughly 70% of all federal student loan borrowers, the bulk of which are black and Latino.
“Not only are Black students more likely to take on student loans than their white peers, but they also end up holding nearly twice as much debt as their white peers four years after graduation,” the White House said in a release published Monday morning. “And Latino borrowers are also more likely to default on their student loans compared to white borrowers.”
Biden’s plan would either fully eliminate or reduce debt for the following categories of borrowers, according to a fact sheet released by the White House:
- Borrowers who owe more than they did at the start of repayment
- Borrowers who are otherwise eligible for Biden’s loan forgiveness initiatives but who have not yet applied
- Borrowers who have been paying down student loans for more than 20 years
- Borrowers whose loans were used to enroll in “low-financial-value programs”
- Borrowers who are experiencing “hardship paying back their loans,” which is “undermining their ability to build generational wealth, start businesses, buy homes, and more”
The White House claimed Biden’s proposal would fully eliminate accrued interest for 23 million borrowers while totally eliminating remaining balances for 4 million borrowers. An additional 10 million borrowers will see reductions of $5,000 or more.
Still, the proposal, like his first actions on student loan debt, faces an uncertain future in the courts, and it will take months for the Department of Education to finalize the rule.
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“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 told reporters on Sunday.
Biden is traveling on Monday to Madison, Wisconsin, where he is expected to deliver additional details on the proposal.
