Biden announces launch of student loan forgiveness application
Biden announces launch of student loan forgiveness application
WASHINGTON — Former Vice President Joe Biden on Wednesday announced a new student loan forgiveness plan that will help the estimated 1 million borrowers who were harmed by the current system.
Speaking at a news conference in South Carolina, Biden explained that he would set up a fund, overseen by a new Department of Education, that would forgive $100 a month from the principal balance of student loans over a decade from people who worked and paid in throughout college or high school.
Under Biden’s plan, borrowers would receive a statement of their income as well as information about past default rates. They would be required to send in a form every six months giving them information about their debt as well as information on their plans to repay the debt.
Biden suggested he would make the program permanent.
“I am committed to ensuring that every person who took on loans to pursue studies at public universities has a clear shot at a brighter future,” Biden said. “Today’s announcement will help make it happen.”
The plan could help millions of borrowers, as more than 40 million Americans have student loan debt. Last year, almost 20 percent of borrowers with federal student loans defaulted on their payments, either because they didn’t pay their loans as promised or because they were unable to find enough jobs to make ends meet. And the most recent Treasury Department data show that 10 percent of borrowers with federal loans have defaulted in the first two years of repayment.
Biden’s announcement comes nearly three years into his presidency and four years since a deal to resolve the nation’s student loan crisis was approved by Congress.
In the wake of that agreement, a program that provides some debt relief for graduates of for-profit colleges was dismantled, the Education Department also abandoned plans to create forgiveness, and the nation’s largest lender, Wells Fargo, was hit with a $185 million federal fine because of mortgage practices that included providing financial services for members of the Trump family.
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