The Biden administration is reaching out to millions of borrowers this week with exciting news about their plans to cancel student debt. In an email reviewed by CNBC, the U.S. Department of Education states, “We want to make you aware of this potential relief.” This new initiative could impact over 25 million borrowers, according to the Department of Education’s estimates.
Who Will Be Eligible?
On the same day the Supreme Court halted President Joe Biden’s initial student loan forgiveness plan, Biden revealed that the White House is gearing up to offer relief through a new approach. To overcome the next set of legal hurdles, the Education Department has refined its forgiveness plan to be more focused and targeted. Here’s who might be eligible:
- Borrowers who owe more now than when they first started repayment.
- Those who began repaying their undergraduate loans on or before July 1, 2005, or their graduate loans on or before July 1, 2000.
- Individuals eligible for student loan forgiveness through existing government programs but haven’t applied yet.
- Students from programs deemed to have “low financial value.”
Do I Need to Take Any Action?
Good news! If you want to be included in the student loan relief, you don’t need to do a thing. The Education Department confirms that no application is required. However, if you decide to opt out of the debt forgiveness, you must notify your loan servicer by August 30.
Potential Legal Challenges
Opponents of the student loan relief are gearing up for a fight, according to higher education expert Mark Kantrowitz. “Expect a lawsuit to be filed as soon as the rule is finalized,” Kantrowitz said. “They’ll likely seek a temporary injunction to halt the Biden administration’s loan forgiveness while the legal battle unfolds.” If this happens, borrowers could be left waiting for months, or even longer, for news on the relief. The case might even reach the Supreme Court again, and its fate would remain uncertain.