Helping 8 Million Struggling Students: A New Plan for Debt Relief

Having a hard time paying your student loans because life threw you some unexpected curveballs. The U. S. Education Department has proposed new rules that could provide debt relief for nearly 8 million borrowers facing financial hardships. These hardships might include high medical costs, childcare expenses, or even natural disasters. The rules, developed last February, aim to help borrowers who are likely to struggle with loan repayment. Education Secretary Miguel Cardona believes the current system is broken and makes it tough for those facing hardships to get relief. The new rules would offer two paths for loan forgiveness. One is automatic and based on borrower data, predicting a high chance of default within two years. The other requires an application, assessing the borrower's hardship holistically.Qualifying hardships include medical bills, child care costs, caring for chronically ill loved ones, or economic crises from natural disasters. The rules, if finalized, will not only help current borrowers but also those in the future. Before the rules are set in stone, they'll be published in the Federal Register, followed by a 30-day public comment period. The Biden-Harris administration has already approved student debt relief for about 5 million borrowers, totaling $175 billion through various programs.