Biden’s Education Department Proposes $85 Billion In New Student Loan Cancelations

Biden’s Education Department Proposes $85 Billion In New Student Loan Cancelations

Discussion about whether President Biden will forgive $10,000 in student loans for all borrowers dominates headlines. But behind the scenes, Biden’s Department of Education has canceled tens of billions of dollars by turbocharging existing loan forgiveness programs. A set of proposed regulations released on Wednesday would expand those avenues for forgiveness even further.

The proposed regulations would loosen the requirements for a number of loan cancelation programs such as borrower defense to repayment and Public Service Loan Forgiveness. According to the Department’s estimates, these expansions of cancelation authority would cost taxpayers $85 billion, including $46 billion for cancelation of outstanding loans and $39 billion for cancelation of loans to be issued over the coming decade.

Key components of the proposed regulations

The proposed rule would modify several existing loan forgiveness programs to make them more generous. In each of these cases, Congress has authorized a specific avenue for loan forgiveness and left the details to the Department of Education. Below are several of the highlights of the proposed changes.

Borrower Defense to Repayment: Currently, student borrowers can receive discharges of their federal loans if their college defrauds them in some way. The proposed regulations would expand this program to allow discharges when the Department