HIGHER EDUCATION

The new proposal will focus on providing debt relief to those with older loans or loans with large sums of interest; those with high-cost, unavoidable child care or health care expenses; borrowers who are highly likely to default; and others who face “financial hardship.”

Now, both bills must pass in opposite chambers before they are sent to Gov. Glenn Youngkin’s desk for his consideration.

More than 48,000 Virginians have had their student debt discharged or have been identified for debt relief due to the Biden administration’s reforms of the student loan debt system.

This round of debt relief will eliminate the debt of 125,000 borrowers nationwide: 22,000 with disabilities, 51,000 through an income-driven repayment plan, and 53,000 through the Public Service Loan Forgiveness program.

Nearly half of all borrowers say they aren’t financially prepared to begin repaying their debt. Despite this, interest began accruing again on Sept. 1, and payments will be due again in October.

The Biden administration has begun the process of creating a new plan for widespread loan cancellation and implementing the SAVE Plan, which will cut monthly payments to $0 for millions of borrowers. There will also be a 12-month “on-ramp” period to ease borrowers back into making payments.

For many borrowers, qualifying monthly payments that should have moved them closer to forgiveness were not accounted for, effectively forcing them to make extra payments under their IDR plans.