The U.S. Department of Education (ED) on April 16 released a proposed rule to provide relief to certain student loan borrowers, including those who owe more than they originally borrowed due to interest. The new plan calls for borrowers of all student loan types held by the Department to have up to $20,000 of unpaid interest on their federal student debt forgiven, regardless of their income. Borrowers enrolled in any federal income-driven repayment plans making less than $120,000 for individuals and less than $240,000 for married couples would see all of their interest forgiven.
No application would be needed for borrowers to receive relief if the plans are implemented as proposed. The Biden administration hopes that by narrowing its aid to specific groups of borrowers, the new plan will survive legal challenges after his first plan was struck down by the Supreme Court last summer.
