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MADISON, Wis. — President Biden on Monday said 30 million former students will see relief under a new plan that relieves high student debt from interest and for-profit colleges, his latest attempt to wipe away college loans and woo young voters who might ditch him over his advanced age and the war in Gaza.
The plan would cancel up to $20,000 in interest for more than 25 million borrowers whose unpaid interest has swelled beyond the size of the original loan. By erasing the interest, the proposal would reset the borrowers’ income back to the initial balances for a repayment plan.
“Too many Americans, especially young people, are saddled with unsustainable debts in exchange for a college degree,” Mr. Biden said at the Truax campus of Madison College. “The ability for working and middle-class folks to repay their student loans has become so burdensome that a lot can’t repay even decades after being in school.”
The plan is smaller in scope than his first debt relief plan, which the Supreme Court ultimately blocked and declared unconstitutional, though conservatives said the new plan still amounts to a vote-buying scheme.
Mr. Biden hopes the new strategy will lift his sagging polling numbers ahead of the November election. He needs the boost, especially among young progressives who have soured on Mr. Biden’s handling of the Israel-Hamas conflict.
Tens of thousands of Democratic voters selected an “uncommitted” option instead of Mr. Biden as protest votes in Democratic primaries across in upper Midwest — states the president will likely need to win reelection this fall.
Several polls show Mr. Biden trailing former President Donald Trump, the presumptive GOP presidential nominee, but it is unclear how quickly the administration can finalize the student debt rules during the sprint to November.
Some Republican attorney generals say the latest proposals are ripe for political challenges.
“[A]s hard-working Americans struggle to buy groceries, Biden thumbs his nose at the court like he has done with so many issues, including immigration, and does what he wants,” Florida Attorney General Ashley Moody said in a statement. “Not only is this unfair, but it violates the separation of powers.”
Senate Majority Leader Charles E. Schumer fought back Monday on the public relations front, declaring Democrats “relentless in doing everything we can to lower costs and make college more affordable.”
The president characterized debt forgiveness as a broad societal good that will pay dividends across communities, hoping to blunt criticism that college-educated persons, who often earn higher wages, do not need a bailout.
Debt is not just a drag on the students, he said, “it’s a drag on our local economies.”
Borrowers paying down their student loans for decades would get all remaining debt erased under the new plan. Loans used for a borrower’s undergraduate education would be canceled if they had been in repayment for at least 20 years.
The plan would also cancel loans for those who went to for-profit colleges that the administration has deemed “low-value.”
Borrowers would be eligible for cancellation if, while they attended the program, the average student loan payment among graduates was too high compared with their average salary. It would also provide debt relief to students who attended for-profit universities that have since closed.
“We’re committed to holding colleges accountable when they leave students with mountains of debt and without good job prospects,” White House press secretary Karine Jean-Pierre said.
Also, borrowers who experienced hardship in their daily lives — preventing them from fully paying back their loans now or in the future — would also be eligible for student debt relief.
The proposal would also wipe away debt for borrowers who are eligible for loan forgiveness but have not yet applied.
The Job Creators Network Foundation, a conservative advocacy group, called the plan “nothing more than a vote-buying exercise heading into election season.”
“Forgiving student debt only gives colleges a blank check to keep on raising tuition at more than twice the inflation rate, knowing that taxpayers will pick up the tab,” foundation President Elaine Parker said. “This does nothing to address the college debt crisis and will only saddle future generations with even more debt in the years to come. It is nothing more than a vote-buying exercise heading into election season.”
The new regulations come roughly a year after the Supreme Court nixed Mr. Biden’s first debt cancellation plan, which would have wiped away up to $20,000 in student debt for borrowers making less than $125,000 per year.
Almost half of voters, roughly 48%, said canceling student loan debt is an important issue to them in the presidential election, according to a poll last month by SocialSphere, a research and consulting firm.
About 70% of Gen Z and millennial respondents said student debt cancelation was an important election issue.
After the Supreme Court rejected his first student loan cancellation plan in June 2023, Mr. Biden vowed that he would try again using different legal authorities to implement debt forgiveness. That started a lengthy process by the Department of Education to redefine how the federal government can eliminate student debt.
The latest proposals are based on a 1965 law, known as the Higher Education Act, that authorizes the Education secretary to waive or release some borrowers’ education debt.
The plan will be finalized through the federal government’s rule-making process instead of an executive order, which was used to implement the first plan. That means there will be a public comment period, which will likely last 30 days.
• Jeff Mordock was traveling with the president.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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