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A look at Biden's new plan for student debt relief

ARI SHAPIRO, HOST:

Today, the Biden administration unveiled the details of a new plan designed to help student loan borrowers. Here's President Biden speaking in Madison, Wis.

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PRESIDENT JOE BIDEN: Today I'm proud to announce five major actions to continue to relieve student debt from more than 30 million Americans.

SHAPIRO: To date, the Biden administration has already canceled $146 billion in student debt. NPR's Sequoia Carrillo is following the story. Hi, Sequoia.

SEQUOIA CARRILLO, BYLINE: Hello.

SHAPIRO: Tell us the details of this new plan.

CARRILLO: Well, today's announcement is kind of a portfolio of student loan forgiveness plans, as you heard from President Biden. And they all target specific groups of borrowers like those with very old loans, those experiencing financial hardship and those who got sucked into what the White House calls low financial value education programs - people who attended schools that, say, lost accreditation or closed. All of these groups would see expanded forgiveness under the proposed plans. And another big focus is to curb interest. More than 25 million borrowers owe more now in student loans than what they initially took out, and that's because of interest. This plan seeks to erase up to $20,000 in unpaid interest for all borrowers, regardless of income, and low- and middle-income borrowers could see all of their accrued interest wiped out.

SHAPIRO: This is still just a proposed plan, right? So how soon can borrowers expect to see any of this implemented?

CARRILLO: You're exactly right. It will take a few months for us to even have the final versions of these plans in hand. And this time, the administration took a much more traditional approach to policy changes that requires a lot of steps. It's called negotiated rulemaking, and the administration started the process in the fall. Now that the initial plans are announced, those plans go to the public for comment, which, like I said, could take a while, probably months. Wisdom Cole is the national director of the NAACP Youth and College Division, and he was involved in this long negotiation process for these plans. He says even after the policy is finalized, carrying it out will be another challenge.

WISDOM COLE: We've seen this before where we've been able to put out these rules, but part of also making sure people get their debt relief is the process and the implementation of it, making sure that we are implementing this in a way where everybody has access to this, and it's broad enough for folks to enter into this system.

CARRILLO: A trend in the plans released today is that almost all of them will be automatic for qualifying borrowers rather than application based, which was a big push from the negotiation committee Cole was a part of.

SHAPIRO: What has the response been so far?

CARRILLO: While Democratic lawmakers and borrower advocates applauded the announcement, there are still a lot of people who take issue with focusing on debt relief rather than the rising cost of college. Virginia Foxx, Republican chair of the House Education Committee, has long been a critic of student debt cancellation. She said the taxpayers who never went to college come out short in these plans, having to pay for loans for other people who - other people took out and benefited from. Here's what she had to say when NPR asked for her thoughts on today's announcement.

VIRGINIA FOXX: Mr. President, this is not monopoly money. Students, families and taxpayers deserve real solutions to lower the cost of college and fix the federal student loan program.

CARRILLO: It's also worth noting that we're in a heightened political landscape right now. The president is hoping to keep young voters in his camp this November. So as you can expect, the response has been pretty strongly along party lines.

SHAPIRO: That's NPR's Sequoia Carrillo. Thank you.

CARRILLO: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Sequoia Carrillo
Sequoia Carrillo is a reporter for NPR's Education Team. Along with covering big stories like the student debt crisis and segregation in K-12 schools, she reports on innovation in the education space — sometimes for Code Switch.