Department Of Education Aims To Implement New HEA Student Debt Relief Plan This Year

August 27, 2024
The Department of Education is currently finalizing regulations for Biden’s new HEA loan forgiveness plan, aiming to implement it this year.
Student loan borrowers have until Aug. 30 to opt out of the Biden-Harris administration’s new Higher Education Act (HEA) forgiveness plan. The plan seeks to provide debt relief for eligible borrowers, as determined by the U.S. Department of Education.
The newest initiative from the Biden administration aims to partially or completely cancel debt for different groups of federal student loan borrowers. “In early August, we emailed all borrowers about this potential student debt relief,” the Department of Education stated. “If you want to be included in potential student debt relief, you don’t need to take any action. If you don’t want to receive this debt relief, you need to tell your loan servicer. The agency is currently in the process of finalizing new regulations this fall.
“Once the regulations are finalized, we will identify borrowers who are eligible for forgiveness and will apply that forgiveness if the borrower has not opted out.”
If the proposed plan is carried out, the Secretary of Education will be authorized to cancel debt for borrowers, including those who first entered repayment years ago, borrowers who owe more than their original amount, borrowers eligible for relief who haven’t applied, and borrowers who attended an institution that failed to provide financial value or one of the department’s accountability standards.
Forbes reported that the Department of Education is working to implement the new student debt relief plan starting in October. However, the process may face challenges from Republican state leaders who previously challenged Biden’s HEROES Act with arguments that claimed the plan was too massive and expensive.
As previously mentioned by BLACK ENTERPRISE, the Biden-Harris administration announced the HEA forgiveness plan in September 2023 following a June 2023 ruling by the Supreme Court that hindered Biden’s attempt at student debt cancellation. Only a small fraction of the over 40 million borrowers who hold student loan debt have had their loans forgiven. Research in 2023 revealed that student loan forgiveness may potentially increase wealth for Black borrowers by 40%.
The Department of Education stated that anyone who opts out of the new HEA plan will also be “opting out of forgiveness due to enrollment in an income-driven repayment (IDR) plan for the next several months.” To opt out of forgiveness, borrowers must contact all of their servicers by Aug. 30 and won’t be able to opt back in. Servicers won’t be able to provide borrowers with eligibility status.
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