INDIANAPOLIS — Student loan debt forgiveness is something millions of Americans would like to see happen. Anne Schlotman an Indianapolis resident is one of those borrowers.
"I took one loan out to go to IUPUI for one semester and I am still paying on that semester,” Schlotman said. “It started at 8,000 dollars and it is now roughly about 24,000."
Her story isn’t unique. Millions of Americans are in the same boat. However, an announcement from President Biden aims to help people like Schlotman.
Under the proposal, 25 million people could benefit. It would forgive $20,000 in interest for borrowers that owe more now than when they first started paying their loan.
The plan would cancel interest for people enrolled in certain re-payment plans.
And borrowers who have been paying for two decades and are still paying loans could have their debt canceled too. The department of education will also propose a new rule to cancel student debt for Americans facing financial hardship.
"Aside from that financial hardship category, all of this should be happening automatically behind the scenes,” Jill Desjean with the National Association of Student Financial Aid Administration said. “Students should just learn that they qualify for this forgiveness when the department ultimately implements it.”
The National Association of Student Financial Aid says that it's unclear what the regulatory guidelines will be when it comes to what qualifies as financial hardship. But they say legal challenges are less likely in this proposal than the one struck down by the supreme court.
"Less likely than with the broad scale loan forgiveness because they have identified these very specific populations of people who really you know had they had done just one other thing right they would have gotten loan forgiveness,” Desjean said.
As for borrowers like Schlotman, she says she will believe it when she sees it.
"There's going to be someone at the top that's not going to let the common person catch a break you know,” Schlotman said.
Policy experts say this plan could be implemented this fall or sooner. That depends on how the department of education decides to move forward. To read more about the proposal click here. Specific details have yet to be released but are expected in the future.
