Biden administration eyes student debt forgiveness for those experiencing 'hardship'

The Biden administration announced Thursday that it will seek to give student debt forgiveness to those experiencing “hardship” in the president’s latest plan for debt relief. 

The hardship category is one of five in Biden’s new student debt relief plan that is going through the negotiated rulemaking process, where relevant stakeholders come together to discuss and revise the president’s proposals before the final plan is determined. 

The administration is proposing that hardship is determined by multiple factors, with examples such as "a borrower’s total student loan balance and required payments relative to household income, and whether a borrower has high-cost burdens for essential expenses like healthcare or childcare.” 

“College is meant to lead to a better life, but too many students end up struggling due to their student debt,” said Education Under Secretary James Kvaal. “The ideas we are outlining today will allow us to help struggling borrowers who are experiencing hardships in their lives, and they are part of President Biden’s overall plan to give breathing room to as many student loan borrowers as possible. It’s an important part of the Biden-Harris Administration’s permanent solutions to the problem of unaffordable loans.” 

The “hardship” requirement could be determined through a methodology created by Education Secretary Miguel Cardona and through an application process.  

The other categories of individuals who could get debt relief in this plan are those who have been in repayment for a long time, those who went to a career training program that was not financially successful, those whose loans exceed what they originally owed and borrowers who have been eligible for debt relief through different plans but have not received it.  

The negotiated rulemaking could still take months to solidify a final plan, which will ultimately face legal challenges from conservatives opposed to the debt relief.