UPDATED 3:53 PM PT – Thursday, November 17, 2022
The Biden administration has announced new guidelines for student loan borrowers in hopes of keeping their student loan forgiveness plan alive. These new guidelines come despite facing legal challenges on their student loan forgiveness plan.
Updated guidelines released on Thursday indicated easier steps for those with student loans to discharge debt in bankruptcy.
The Justice Department and the Department of Education rolled out a new process for discharging federal student loans. The departments stated that those who wish to discharge their debt must prove “undue hardship.”
These departments indicated that the process will translate to a “better, fairer, more transparent process for student loan borrowers in bankruptcy.” However, critics say it seeks to undermine Congress standards for canceling debt.
Senate Minority Leader Mitch McConnell (R-Ky.) took to the Senate floor on Thursday. There, he criticized Joe Biden’s overall loan forgiveness plan and how it is an insult to working families.
“President Biden decided that working people who worked their way through college or paid off the debt or found another way to avoid student loans, President Biden said all those people will pick up the tab for doctors and lawyers’ graduate studies,” McConnell stated.
Meanwhile, the Biden administration has experienced a litany of challenges in court regarding the plan. The administration was forced to stop accepting applications for the program. Before the administration was forced to stop accepting applications, nearly 26-million people had applied.
Additionally, according to recent data, over 250,000 student loan debtors file for bankruptcy yearly, but many are denied. Currently, the outstanding student debt exceeds one-trillion dollars.
While many would love to have their student debt canceled, critics like McConnell and the chairman of O’Leary Ventures, Kevin O’Leary, have pointed out the ripple effect that cancelling student debt would have on everyone else.
“What do you say to people for generations now that realize like everybody does that education is not a right, it’s a privilege,” O’Leary said. “You make a decision as a young adult to pursue an education for a wide range of reasons, including advancing yourself and your career, your salary, etc, that’s proven to work. But, you take on responsibilities including student debt.”
O’Leary went on to criticize the political game of it all.
“Why, why would you do this?” he questioned. “This is a really, really, really bad idea and it brings into question… who is advising Biden? Who are his closest advisors? What planet are they on? Not the planet earth.”
Meanwhile, the administration is working to overturn court orders that are attempting to block their student loan forgiveness. They are telling those who have applied to check back for updates.