On April 16, the Biden Administration unveiled its latest proposal to forgive student loan debt for qualifying borrowers after the U.S. Supreme Court blocked its previous proposal in Summer 2023.

Last year’s blocked proposal would have broadly canceled between $10,000 and $20,000 of borrowers’ federal student loan debt based on the borrower’s income. The new proposal still aims to cancel federal student loan debt for a large number of borrowers, but notably differs from last year’s proposal as it specifies a list of circumstances in which a borrower would qualify for forgiveness rather than relying exclusively on a borrower’s income data.

The proposed regulations would provide loan forgiveness for:

  • Borrowers with runaway interest up to $20,000 for those who owe more than they did when they started payments, due to interest accrual
  • Borrowers who entered loan repayment at least 20 years ago
  • Borrowers who are not currently enrolled in an income-driven repayment (IDR) plan or have not successfully applied for closed school discharge but meet the criteria for forgiveness under an IDR plan or closed school discharge
  • Borrowers who used federal loans to attend an institution that has either closed or is no longer eligible to participate in Title IV federal student loan programs due to an inability to meet federal accountability standards

Notably missing from the new regulatory proposal is language that would provide loan forgiveness for “borrowers experiencing hardship.” The U.S. Department of Education (ED) exclusively dedicated its last negotiated rulemaking session in February 2024 to this topic but has not officially released a regulatory proposal that was developed during the session. ED did indicate that its final proposal for forgiveness based on hardship would mirror this four-page draft.

The rules were officially published on April 17 with a 30-day comment period. Both the new proposal and the forthcoming proposal on hardship are subject to the regulatory review process which requires a public comment period and final approval from the U.S. Office of Management and Budget (OMB). Implementation of the forgiveness regulations could happen as early as Fall 2024 pending any court injunctions. It is likely the Biden Administration will work quickly to have the rules finalized before the November presidential election.