Biden administration kicks off Plan B of student debt relief

The Biden administration’s second attempt at canceling large swaths of student debt will be aimed at helping “borrowers who need it the most,” according to a top Education Department official.

James Kvaal, the undersecretary of education, said Tuesday that the administration was moving as “quickly as possible under the law” to craft a new debt relief program in the wake of the Supreme Court’s ruling last month striking down President Joe Biden’s initial plan to wipe out up to $20,000 of debt for tens of millions of borrowers.

“Our goal is to provide debt relief to borrowers, particularly those working- and middle-class borrowers who need it the most,” Kvaal said in opening remarks at a public hearing Tuesday. He added that “far too many student loan borrowers have been left with debts that are unaffordable, unreasonable, and unacceptable.”

The day-long virtual hearing kicked off the Education Department’s process for crafting new regulations that cancel debt under longstanding provisions of the Higher Education Act. The Biden administration is relying on that law after the Supreme Court last month rejected its attempt to cancel student debt using emergency powers related to the Covid-19 pandemic.

Biden administration officials have publicly offered few details about how they intend to structure the new program. They’ve also declined to commit to making sure that borrowers who were promised debt relief under the first program would continue to be eligible for relief under the new program.

Kvaal did not mention the economic effects of the pandemic on student loan borrowers in his remarks on Tuesday. He instead took a broader view of tackling unaffordable debts and remedying structural problems in the financing of American higher education.

“We want to help borrowers who were let down by the fundamental bargain of federal loans: that investments in yourself and your education will help you get a better life,” Kvaal said on Tuesday. “We want to help those who have seen their debts get out of hand, even as they make the payments that we asked.”

"We remain committed to the idea that a college credential is one of the best tools for building a stronger America but we can't bury the dreams unlocked by college under mountains of unaffordable debt," he said.

Kvaal also acknowledged that the regulatory process would be lengthy, noting that it would take the Education Department "a number of months" to fulfill the “procedural requirements” of developing new rules.

“We know how important it is to borrowers and how urgently they need help,” he said. “We'll move as fast as we can.”