on Monday released a draft of new federal rules paving the way for a second attempt at student loan relief. The proposal targets groups that are seen as especially vulnerable, focusing on those who owe so much, or make so little income, that they otherwise may never repay their loans.or all student debt
The average American has more than $92,000 in debt, which includes credit cards, student loans, mortgages and more. The new proposal aims to tackle issues that are seen as some of the biggest culprits behind skyrocketing debt. Loans used to attend low-value college programs would also be wiped away. Borrowers would fall into that category if they attended a program that fails new standards outlined in a separate federal rule known as gainful employment.
The latest attempt rests on the Higher Education Act of 1965, a wide-reaching law that gives the education secretary power to “compromise, waive or release” certain debts. But the law is unclear on how the secretary can wield that authority, creating a legal gray area that has been the subject of debate since Biden took office.
Biden called for a plan to help “as many borrowers as possible,” but his administration seems to be moving away from the type of mass cancellation that he promised in August 2022.In a separate action on Monday, the Education Department moved to correct errors by a student loan servicer that failed to send billing statements on time.