After a months-long negotiated rulemaking process, President Joe Biden and his administration have unveiled a new proposed regulation to provide debt relief to student loan borrowers facing financial hardship.
The proposal would give the Secretary of Education the power to waive some or all federal student loan debts for borrowers facing hardship that “is likely to impair the borrower’s ability to fully repay the Federal government or the costs of enforcing the full amount of the debt are not justified by the expected benefits of continued collection of the entire debt,” the draft reads.
It goes on to list 17 non-exclusive factors that could substantiate hardship. The Education Secretary may consider any of the following factors:
- Household income
- Assets
- Type of loans and debt balance
- Current repayment status and history
- Total student debt balance and payments relative to income
- Total debt balances and required payments relative to income
- Receipt of Pell Grant and other information from the …