WASHINGTON (NEXSTAR) – The Education Department is giving borrowers eligible for a revised student loan forgiveness program until the end of August to opt out.
U.S. Assistant Secretary of Education James Kvaal said eligible borrowers seeking relief do not need to apply and will be automatically enrolled in the program.
But first the plan must be finalized. Kvaal expects the legislative process to be completed in the fall.
“Our goal is to finish in October and start providing assistance to as many students as possible as soon as possible,” Kvaal said.
According to the draft regulations, the proposed program would provide partial or full debt relief to borrowers who now owe more than they originally took on due to “galloping interest rates.”
The Department of Education estimates that nearly 23 million borrowers, the majority of Pell Grant recipients, would benefit. The plan also promises relief for borrowers who have been making repayments for more than 20 years.
“We don’t believe that’s right. Student loans are not a life sentence,” Kvaal said. “We’re working hard to reach as many people as possible.”
Adam Kissel, a fellow for higher education reform at the Heritage Foundation, expects the Biden administration, seeking to win favor with juvenile voters, will try to begin forgiving student loan debt before Election Day.
Kissel said the Biden administration’s August 30 exit deadline was merely a legal strategy to avoid inevitable lawsuits.
“This is definitely a step to ensure that anyone who wants to get out can do so and will no longer be eligible to challenge the debt relief,” Kissel said.
Kissel said he believes loan servicers will have the right to challenge the rule. He expects Republican attorneys general to move quickly in court to prevent the program from being implemented.
