Washington, D.C., — The Biden administration announced today a new set of plans that would provide student debt relief to more than 30 million borrowers. If enacted, the proposals would waive accrued and capitalized interest— unpaid interest that is added to the principal of the loan— for millions of low-income borrowers, and up to $20,000 in unpaid interest for other impacted borrowers. The proposals would also make a new group of borrowers eligible for forgiveness without requiring their enrollment in the Saving on a Valuable Education (SAVE) program.
In response, Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending (CRL), made the following statement:
We commend the Biden-Harris administration for its continued efforts to make student loan repayment fairer for consumers. Congress never required the Department of Education to capitalize most interest on these loans; so, it’s well past time to make things right for the millions of affected borrowers. This is a policy shift CRL has promoted for years. We urge the Administration to continue enacting meaningful reforms like those proposed today that will allow borrowers to save money to buy a home, start a business, or save for retirement.
Additional Background
- Low-to-middle income borrowers on any income-driven repayment (IDR) plan could see their entire capitalized interest balance waived under the new proposals, even if they are not enrolled in the SAVE program.
- Borrowers who have been repaying their undergraduate loans for more than 20 years (or 25 years for graduate loans) will be eligible to have their student debt forgiven.
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Press Contact: Vincenza Previte vincenza.previte@responsiblelending.org