President Joe Biden's administration has withdrawn a previously announced plan that aimed to provide student debt relief to nearly 8 million borrowers. Initially revealed in October, this proposal would have alleviated the debts of qualifying borrowers grappling with considerable medical bills, childcare costs, family care expenses, or financial distress resulting from a natural disaster.
The move to rescind the proposal stems from the administration's decision to pivot its focus on other urgent matters with the limited time left before President-elect Donald Trump assumes office. Priorities include assisting borrowers once the grace period concludes, a timeframe which allowed loan repayments to commence following the pandemic-induced freeze.
Nevertheless, the Department of Education asserted its power to implement student debt relief for borrowers who find it challenging to afford their payments due to these aforementioned hardships. The question of whether the president's administration has the authority to forgive student debt independently without the green light from Congress has sparked many legal debates concerning Biden's student loan relief schemes.
This retraction is part of a broader initiative undertaken by the Biden administration to resolve outstanding issues ahead of a potential government shutdown and President-elect Donald Trump's inauguration. In a related move, the administration forgave $4.28 billion in student loans for public service workers last Friday.