


By Eliza Haverstock, NerdWallet
Eight million borrowers facing “persistent financial burdens,” such as those brought on by unexpected medical bills, natural disasters or high child care or family caregiving costs, could qualify for federal student loan forgiveness — but it’s not a done deal yet.
The Education Department revealed new details of the financial hardship proposal on Friday, Oct. 25, including eligibility criteria and how borrowers could apply for the relief.
“For far too long, our broken student loan system has made it too hard for borrowers experiencing heartbreaking and financially devastating hardships to access relief, and it’s not right,” U.S. Secretary of Education Miguel Cardona said in a statement.
The hardship proposal is part of President Joe Biden’s student loan forgiveness ‘plan B,’ which currently faces legal challenges. The president introduced ‘plan B’ in June 2023, after the Supreme Court blocked his original up-to-$20,000 student loan forgiveness plan. The Education Department kicked off the rulemaking process in October 2023.
The Education Department aims to finalize the plan in 2025, but lawsuits could impact that rollout. The department will formally publish the proposed regulations in the coming weeks. Once published, the public will have 30 days to comment on regulations.gov.
“While this is yet another lawful avenue to cancel student debt, pushback is anticipated, so it is crucial that we move forward quickly to deliver this much-needed relief,” said Kristin McGuire, executive director of Young Invincibles, a policy organization focused on issues affecting young people, in a statement.
If the hardship proposal goes into effect, borrowers would have two main pathways to this student loan forgiveness:
For now, borrowers should not count on Biden’s student loan forgiveness ‘plan B’ — especially ahead of the Nov. 5 presidential election. The candidates, former president Donald Trump and Vice President Kamala Harris, hold starkly different student loan positions.
“I have so little faith in that actual forgiveness program coming to fruition,” says Stanley Tate, a lawyer who specializes in student loans. “Even if you have what you would believe to be a pro-forgiveness president in office, they still would be up against challenges from groups who have the right to challenge these things.”
On Oct. 3, a federal judge in Missouri temporarily blocked Biden’s ‘plan B’ for student loan forgiveness, which includes this hardship proposal. A group of Republican-led states including Missouri, Georgia and Alabama filed the lawsuit in September.
“Our latest lawsuit challenges [the Biden-Harris administration’s] third and weakest attempt to mass-cancel student loans in the dark of night without letting Congress — or the public — know about it,” Missouri Attorney General Andrew Bailey said in a September statement.
If you’re struggling with student debt right now, consider these existing relief and forgiveness options instead:
To learn more about your relief options, call your student loan servicer. Your servicer can take a look at your situation and make recommendations. You may also consider reaching out to vetted nonprofit organizations that offer student loan help.
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Eliza Haverstock writes for NerdWallet. Email: ehaverstock@nerdwallet.com. Twitter: @elizahaverstock.
The article Student Loan ‘Financial Hardship’ Forgiveness: New Details Revealed originally appeared on NerdWallet.
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