Why Biden's new plan to cancel student debt is going to take a lot longer than his first proposal
for federal borrowers using the HEROES Act of 2003. That Act allows the Education Secretary to waive or modify student-loan balances in connection with a national emergency, like COVID-19 — but the Supreme Court majority ruled Biden's usage of that act was an overreach of authority and cannot be implemented.
The reason this process will take longer is because the Higher Education Act must go through the negotiated rulemaking process, in which it could take months — at minimum — to hold public hearings on the law and solicit public comment. "It's going to be months," he added."I think, as I said, even the typical rulemaking process typically takes months. But we are aiming to do it as quickly as possible. And so, we will give you more updates as we hit each milestone in that process."
Even as borrowers are continuing to wait for broad student-debt relief, it won't happen before payments resume in October. To ease the transition to repayment, Biden on Friday also announcedfrom October 1, 2023 to September 30, 2024 to ensure that borrowers who miss monthly payments do not get reported to credit agencies. Still, interest will accrue during this time, so Cardona recommended borrowers begin making payments again if they're financially able.
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