The Biden administration is considering a more targeted approach to student loan relief, moving away from a broad plan that was previously rejected by the Supreme Court. Their new proposal focuses on specific groups of borrowers facing financial hardship, aiming to cancel some or all student debt for those with excessive balances, long repayment periods, or poor outcomes from career-training programs. The plan also addresses interest accumulation beyond the initial loan balance and provides relief for those who attended for-profit programs with poor results.

It’s expected to face opposition from Republicans who view loan cancellation as an unfair cost to taxpayers. Additionally, the Education Department is withholding payment from a loan servicer due to billing errors that resulted in delayed statements to millions of borrowers. This highlights challenges as the student loan system resumes payments after the pandemic hiatus.

The original plan would have forgiven up to $10,000 in federal student loans for most eligible borrowers and up to $20,000 for Pell Grant recipients.