Biden Student Debt Forgiveness Plan: What to Know and the Impact on 2024


Ashley Storck and her partner Sam Leary, Madison business owners, introduced President Biden before he gave his remarks. The pair, who are UW-Madison graduates, had recently launched their business when the Supreme Court struck down Biden’s initial student loan forgiveness proposal last summer They turned to the SAVE plan, and now pay $0 a month, versus the $700 they were previously paying.

“We no longer have the fear of our balances increasing because of runaway interest,” Storck told the audience on Monday. “The SAVE plan empowered us to reinvest in our business, hire our first employee, and helps promote economic growth throughout the state of Wisconsin.”

Last June, the Supreme Court blocked Biden’s original student-debt relief plan. Now Biden’s team is attempting student-debt relief again, this time with a new five-pronged plan addressing different facets of borrowing.

“The ability for working middle class folks to repay their student loans has become so burdensome that they can’t be paid for even decades after attending school,” Biden said at Monday’s event.

The administration’s new proposal would cancel debt for borrowers who entered repayment over 20 years ago for undergraduate college or 25 years ago for graduate school. The plan would also work with the Department of Education to hold for-profit universities accountable and cancel debt for individuals who enrolled in low-financial-value programs, or were “cheated by institutions” and left with “unaffordable loans” despite having no good job prospects.

Borrowers who experience financial hardship repaying their loans, such as burdensome medical bills or childcare expenses, are also included in the plans for student debt relief.

One of the hallmarks of Biden’s new policy is the cancellation of runaway interest for millions of borrowers who currently owe more than they originally borrowed. The proposed plans, if enacted, would cancel up to $20,000 of incurred interest. Low and middle-income borrowers enrolled in any income-driven repayment plan, such as SAVE, will be eligible to have the full amount their balance has grown since they started paying it off to be canceled

How was the plan received in Madison?

Fabiola Hamdan, chair of the Latino Children and Families Council in Madison, told Teen Vogue she initially did not want to attend the event due to the administration’s handling of the conflict in Palestine.

“I see how damaging it is to fund military, Israeli military, with our taxpayers’ money. That’s not okay,” Hamdan says. She ultimately decided to attend, and wear her keffiyeh. “I wanted to wear the symbol of Palestine…I proudly wear that and hope that his administration keeps in mind that people are really struggling over there and that we support them from here.”

Despite Hamdan’s frustrations, she says she is hopeful about the plan Biden unveiled. “I work with a lot with students that are really struggling to pay their loans and all of that…this is something that is very important for our students, for our community to have.”

Some of the students who Teen Vogue spoke to on campus echoed the need for student debt relief.

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Tags: 2024, joe biden, palestine, protests, student debt, student loans, u.s. government, youth vote

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