President Joe Biden announced Monday his highly anticipated Plan B for student loan debt cancellation nearly a year after the U.S. Supreme Court struck down his original program. The White House’s announcement asserts that the new plan will provide “significant relief” for Black and Latino borrowers.
“We know there are big racial disparities in the student loan program, and students of color are more likely to borrow larger amounts and are more likely to struggle to repay [their loans],” U.S. Under Secretary of Education James Kvaal told theGrio. Additionally, he said, the program would have a “positive impact on the racial wealth gap.
“Most Black borrowers owe more 10 years out of school than they originally borrowed because of interest outstripping payments,” Kvaal explained. “We need to bring relief to everyone who’s struggling with their student loans.”
What is Biden’s Plan B?
The announcement includes five methods to “fix” the federal student loan program, including providing debt cancellation for borrowers who owe more today than they did when they entered repayment, who have owed for 20 years or more and who are experiencing financial hardship.
The Biden-Harris administration says the plan is designed to provide meaningful relief to Black borrowers who rely more heavily on student debt than white families and who take longer to pay off loans. Combined with the federal government’s existing programs that have canceled $140 billion in student loan debt for four million borrowers, the administration anticipates that more than 30 million Americans will benefit from some form of relief.
Borrowers who owe more than their original balance when they began repayment due to interest will be eligible for federal student loan forgiveness, which Kvaal says is about 25 million borrowers. This will be especially meaningful for Black borrowers who are more likely to experience an increase in their balances,
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