Biden reveals student loan handout plan, some borrowers could have $20,000 in debt 'canceled'

President Biden on Monday unveiled a new student loan handout plan that could “cancel” $20,000 in debt for some borrowers.

The program comes after the Biden administration’s earlier plan to forgive a large swath of student loan debt was swatted down by the Supreme Court.

The Biden administration is attempting to use the rulemaking process as a vehicle to implement the plan, rather than using an executive order. A public comment period will take place once the rule is officially proposed.

One part of the plan proposes to  “cancel runaway interest,” which would cancel as much as $20,000 of interest for some borrowers, regardless of income.

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“Today too many Americans, especially young people, are saddled with unsustainable debts in exchange for a college degree,” Biden said Monday.

For borrowers who are considered low and middle-income and enrolled in the income-driven repayment plan, the proposed rule would cancel their entire interest balance, according to the New York Times.

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The plan would also cancel undergraduate student debt for enrolled individuals who began repayment on their loans over 20 years ago. For graduate students, they would have had to begin payments 25 years ago.

Under the plan, borrowers experiencing “hardship” in paying back their loans due to child care costs or medical care could receive relief as well.