Biden Announces New Student Loan Forgiveness Plan

The president said the plan would focus in large part on 25 million borrowers with so-called "runaway interest."

President Biden announced Monday, a new student loan plan that would forgive debt for millions of Americans.

The president said the plan would focus in large part on 25 million borrowers with so-called “runaway interest.” Those borrowers owe more money now than from the start of repayment. The plan would cancel up to $20,000 of the amount a borrowers’ balance has grown because of unpaid interest.

Those who qualify are enrolled in the SAVE plan or other Income Driven Loan Forgiveness programs.

Biden argued that runaway interest is part of the “broken system” of student loan debt and the administration plans to assist those affected.

If passed, it would likely go into effect this fall, but it risks being legally challenged.