The Biden administration is again taking action on student loan debt, with a proposed plan that could relieve over 30 million Americans. US Department of Education Under Secretary James Kvaal joins Yahoo Finance’s Wealth! to discuss the details of this latest initiative.
Kvaal explains the plan aims to help borrowers “who owe more than they borrowed” due to the accumulation of continued interest. The plan could see individuals have up to $20,000 in extra interest forgiven, which Kvaal estimates could impact as many as 25 million Americans “to get them back to a fair place on their student loans.”
Kvaal acknowledges that the Department of Education is navigating a “lengthy regulatory process” with this proposed plan, but stresses the department’s commitment to finalizing the details in time for potential implementation by the fall.
Kvaal encourages borrowers to visit studentaid.gov/debtrelief to review the full details on eligibility and benefits.
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Editor’s note: This article was written by Angel Smith
Video Transcript
RACHELLE AKUFFO: Well, let’s start with the Biden administration announcing new plans on student debt relief today that would cover over 30 million Americans when combined with previous actions the administration has already taken over the past three years.
Now, this is the president’s latest attempt to bring relief to millions of borrowers after the Supreme Court blocked his original debt cancelation plan last year. Well, here with more on these plans is James Kvaal, US Department of Education Undersecretary. Thank you for joining us this morning.
JAMES KVAAL: Thank you for having me.
RACHELLE AKUFFO: People seeing this announcement– You’re very welcome. What do they need to know about who is eligible under this new proposed plan versus some of these other government plans that are already in place?
JAMES KVAAL: It’s an exciting day here. President Biden is laying out today a new plan for student debt relief that, together with the steps we’ve already taken, will reach 30 million Americans with some forms of debt relief.
One major aspect of the plan is that we are helping people who owe more than they borrowed, because interest can often run away from them. And so we hope to finalize these plans over the next coming months. The next step for us is to publish them for public comment and to begin delivering relief this fall.
RACHELLE AKUFFO: Now, for people who are wondering whether or not they qualify as having financial hardship, that was one of the gray areas in some of the messaging there, what do they need to know about who qualifies so that people can see if that applies to them?
JAMES KVAAL: Well, we’re taking a look, now, as we move through the process. All the information we have is on studentaid.gov/debtrelief. So come take a look there at the questions and answers that we posted there. And while you’re there, take a look at some of the benefits we already have.
There are a lot of people who are eligible for Public Service Loan Forgiveness or who could save a lot of money by enrolling in the SAVE repayment plan. And we hope people will take a look at those benefits and take advantage of them.
RACHELLE AKUFFO: And something else that was interesting looking at the president focusing on the interest rate for some of these loans as well. How would we see that adjusted? How low could that potentially go?
JAMES KVAAL: Well, the adjustment we’re making now has to do with, really, runaway interest. And we have people, in some cases, having made payments for years, who still owe more on their student loans than they originally borrowed. And that doesn’t seem right.
So what the president is proposing today is to forgive extra interest up to $20,000 for everyone and the entire amount of interest for people who are enrolled in the SAVE repayment plan in order to get them back to a fair place…
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