Biden Proposes New Student Loan Forgiveness for Hardship Cases

The plan aims to aid 8 million borrowers but faces potential legal challenges from Republican states.

The Biden administration unveiled a proposal to forgive student loans for borrowers facing significant financial hardships, such as high medical or childcare costs.
The Education Department estimates that approximately 8 million borrowers could benefit from this new rule if it is implemented.
The proposal includes two pathways for loan forgiveness: automatic cancellation for those with an 80% chance of default and an application-based process for others.
The plan faces potential legal challenges similar to previous Biden administration student loan initiatives, which have been blocked by courts.
The proposal will undergo a 30-day public comment period, with finalization expected in 2025, contingent on surviving legal and political hurdles.