Staff Reports
The Biden-Harris administration recently rolled out a grand new plan aimed at bailing out around 8 million student loan borrowers who find themselves under a blanket of “hardship.” In the Department of Education’s latest press release, they propose wiping the entire outstanding balance of student loans for those deemed afflicted by circumstances so dire that they can’t possibly repay their loans, or so they claim.
The proposed rules will be aimed at those borrowers currently not eligible for the administration’s other expansive bailout schemes, opening up the door to a whole new group of financial beneficiaries. Defining “hardship” appears to be a broad affair, encompassing unexpected medical bills, lofty childcare costs, or the tragic fallout from natural disasters. Apparently, just about anything short of an insatiable craving for avocado toast can count as an acceptable excuse to dodge those pesky loan repayments.
Biden Proposes Canceling Student Loans For Financial Hardship—Impacting 8 Million. Here’s Who Could Qualify.https://t.co/5LgfKz9nYh pic.twitter.com/9EHK0cerAE
— Forbes (@Forbes) October 25, 2024
Under this proposal, if finalized, it could set the stage for a massive handout to borrowers—ensuring that even those with an 80% chance of default in the next two years can receive a sweet dose of monetary relief, thanks to the Secretary of Education’s magical pen. This is the kind of governance that stitches together a safety net so large and loose that anyone teetering on the financial edge can simply fall into it without lifting a finger.
The administration is offering two tantalizing paths to salvation. The first path allows the Secretary to grant relief automatically, based on a predictive assessment that presumably evaluates a mix of household income, debt, and a sprinkle of personal hardship. Because what is a little government intervention in the personal affairs of student borrowers? After all, the Secretary surely knows the borrowing habits of people better than they do.
The second path extends the option for borrowers to apply based on a more comprehensive view of their financial situation—again, at the Secretary’s discretion. It’s the epitome of bureaucracy dressed up as benevolence, where isdfualizing hoops to jump through is just part of the game. The expectation is that this proposal will somehow support student borrowers for generations, all while promising relief that might feel just like candy thrown at parade goers—sweet and tempting, but not necessarily nourishing.
As Secretary of Education Miguel Cardona emphasized, this plan is being pushed forward under the guise of aiding those who have suffered under the so-called broken student loan system. His commitment—alongside President Biden and Vice President Harris—to deliver a “fairer” and “more just” student loan environment rings hollow when considering the growing tension with Republicans who see this as nothing more than a pre-election ploy. A public comment period will begin shortly, but with the 2024 elections on the horizon and GOP legal challenges looming, it’s unclear how far this latest initiative will actually go.
As enthusiasm for the proposal swells among the administration’s base, the prospect of debt relief hangs in the air like a piñata waiting to burst. Whether or not the candy falls out of this one will depend on the political winds and the resolve of those in power to truly address the hardships they claim to prioritize.
