Student loan forgiveness: Biden administration proposes sweeping changes to fix 'broken system'
The Biden administration says proposed changes to student loan forgiveness programs would reduce some bureaucracy that gets in the way of relief
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FOX Business' Lydia Hu reports on the latest developments, noting the move does not go far enough for progressive Democrats who are calling for a cancellation.
The Biden administration proposed wide-ranging changes to student loan forgiveness programs that would reduce the bureaucracy currently standing in the way of some borrowers having their debt canceled.
"If a borrower qualifies for student loan relief, it shouldn’t take mountains of paperwork or a law degree to obtain it," Education Secretary Miguel Cardona said in a statement on Wednesday. "Student loan benefits also should not be so hard to get that borrowers never actually benefit from them."
The proposed changes, which the Department of Education hopes to finalize later this year, would make it easier for those who already qualify for existing programs to get debt relief.
A trombone player with the Too Much Talent band performs at a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th street near the White House on April 27, 2022, in Washington, DC. (Anna Moneymaker/Getty Images / Getty Images)
For instance, the Education Department will start processing claims in groups instead of individually under the borrower defense program, which is designed for students who believe that their college lied or took advantage of them.
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The Public Service Loan Forgiveness program, which allows government and nonprofit employees to have their loans forgiven after making 120 monthly payments, will also get an overhaul.
Workers in eligible jobs must currently abide by strict rules, such as making the payment in full within 15 days of its due date. The new rules would eliminate that 15-day requirement.
"Whether it is for closed school discharges, borrower defense claims, PSLF, or relief after a total and permanent disability, borrowers have had to navigate narrow rules and a needlessly complicated system," James Kvaal, the Under Secretary of Education, said in a statement on Wednesday.
Activists hold signs as they attend a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th street near the White House on April 27, 2022, in Washington, DC. (Anna Moneymaker/Getty Images / Getty Images)
"The regulations we’ve proposed today would remove many of those barriers and help create a federal student loan system that works better for borrowers," Kvaal added.
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Biden announced two rounds of student loan forgiveness last month worth about $12 billion, mostly for students who attended for-profit colleges.
The president has so far resisted calls from the progressive wing of his party to cancel up to $50,000 in student loan debt for every borrower, but the Washington Post reported in May that he is considering a smaller, more targeted cancellation of student debt.
The Associated Press contributed to this report.