Biden takes final step toward student loan forgiveness before Trump takes office

President Biden is making a last-ditch effort to cancel more student debt before the end of his term after years of failure in his efforts to erase billions of dollars in borrowed money.

This month, the Department of Education announced an interim final rule extending the deadline for student loan borrowers to enroll in long-term time-based programs.

The provision amends Income Contingent Repayment (ICR) to extend the deadline for borrowers to enroll in ICR or Pay-As-You-Earn (PAYE), a program that cancels all student debt for borrowers after 20 years of on-time payments. . The registration period will be extended by three years, from July 2024 to July 2027.

However, those rules are scheduled to take effect in July 2026, meaning the new Trump administration could intercept any handout initiatives that take effect after his term.

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The announcement came just weeks after the Biden administration put forward an additional new rule that, if finalized, would allow one-time student debt forgiveness for people who the department determines have at least an 80% chance of defaulting on their loans. based on “a forward-looking assessment using existing borrower data.”

Also in October, the administration announced plans to pay off $4.5 billion in debt owed by more than 60,000 government borrowers.

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During his 2020 presidential campaign, Biden promised to forgive the student loans of millions of Americans if elected, but the president has repeatedly faced legal obstacles in his efforts to pay off hundreds of billions of dollars in debt.

Biden’s original plan called for debt forgiveness of up to $10,000 and up to $20,000 for Pell Grant recipients for people who make less than $125,000 a year, which was estimated to cost more than $400 billion.

However, in June 2023, the Supreme Court ruled against Biden’s plans to cancel the loan, saying the education secretary could not forgive more than $430 billion in student debt.

The President, however, made another attempt to cancel the debts of approximately 30 million Americans. Biden’s second proposal would eliminate up to $20,000 in interest for Americans who owe more than they borrow, as well as cancel all debt for those who pay off student loans over 20 years or more.

President-elect Trump has not said specifically how he will approach the Biden administration’s student loan forgiveness plans, but has said he plans to overhaul the entire education system during his term.

Trump’s former education secretary recently told Fox that Biden’s attempt to give away student loans should be re-evaluated by the new administration.

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“There’s every argument that if taxpayers are going to fund student loans, it’s better to have ways to control it and do it effectively and efficiently,” former Education Secretary Betsy DeVos said in a recent interview with Fox News Digital. “But this is not happening. It’s a huge mess and it needs to be rethought and reconsidered, and frankly the private sector, private sector lending needs to come back to that and become an option.”

Fox News’ Alec Schemmel, Chris Pandolfo and Jamie Joseph contributed to this report.