Biden Has a Plan B for Student Debt Relief
The Biden administration is pushing forward with another approach to tackling the student debt crisis while its main initiative, a plan to forgive up to $20,000 in student loans per borrower, remains mired in legal limbo.
Even if the debt-forgiveness effort is struck down by the courts, the Department of Education's Plan B could help millions of borrowers by overhauling income-driven repayment plans. It also addresses some of the worst pitfalls of student debt, such as "negative amortization," or when a person's loan balance keeps growing despite their consistently making payments.
The plan to reform income-driven repayment plans, or IDRs, was first announced in August but was overshadowed by the Biden administration's blueprint for forgiving up to $20,000 in debt per borrower. But with the debt-relief program stopped in its tracks by legal challenges — and now headed for the conservative-leaning Supreme Court — the Education Department said it is moving forward with the other part of its plan, which will overhaul IDRs with the goal of helping lower- and middle-income borrowers.
« Return to "Latest News" Go to main navigation