Joe Biden seeks to cancel some interest on student loans, aiding 23 million Americans

Joe Biden seeks to cancel some interest on student loans, aiding 23 million Americans

U.S. President Joe Biden will announce on Monday new plans to ease student debt that would benefit at least 23 million Americans, the administration said, addressing a key issue for young voters whose support he needs in the election this year.

The plans, which Biden will detail in Madison, Wisconsin, include cancelling up to $20,000 of accrued and capitalized interest for borrowers, regardless of income, which the administration estimates would eliminate the entirety of that interest for 23 million borrowers.

Progressive voters, whom Biden hopes will support him in November's election, have long urged the White House to address student loan debt.

The issue remains high on the agenda of younger voters, many of whom have concerns about Biden's foreign policy on the war in Gaza and fault him for not achieving greater debt forgiveness.

The new plans also include automatically cancelling debt for borrowers who are eligible for certain forgiveness programs, who entered repayment decades ago, who enrolled in low financial value programs, or who are experiencing hardship.

If the plans, which have to go through a public comment period, are finalized, they would take effect as early as this fall, White House spokesperson Karine Jean-Pierre said in a call with reporters.

"We're delivering as much relief as possible for as many borrowers as possible, as quickly as possible," said U.S. Secretary of Education Miguel Cardona. "It means freedom from feeling like your student loan bills compete with basic needs, like groceries or healthcare."

When combined with previous actions the Biden administration has taken, these plans would benefit over 30 million Americans, Jean-Pierre said.

To date, the Biden-Harris Administration has approved $146 billion in student debt relief for 4 million Americans, the administration said.

Biden has vowed to continue working to deliver student debt relief to as many borrowers as possible in the wake of the Supreme Court's June 30 ruling blocking his plan to cancel hundreds of billions of dollars in debt.

The administration has studied the Supreme Court's decision carefully in crafting the new plans, which would be done under Secretary Cardona's authority under the Higher Education Act, senior administration officials said.

As of June 2023, approximately 43.4 million student loan recipients had $1.63 trillion in outstanding loans, according to the Federal Student Aid website.

Other members of the administration will travel across the U.S. on Monday to announce the new plans, including a trip from Vice President Kamala Harris to Philadelphia.