PHOENIX — On Monday, President Joe Biden announced a new student debt relief plan impacting tens of millions of borrowers.
The White House focused on five key areas. According to a news release from Administration officials, the new plan would:
- Cancel what the White House calls "runaway interest," impacting roughly 25 million borrowers. "Runaway interest" refers to high-interest loans where borrowers now owe more in interest than what they initially borrowed.
- Automatically enroll borrowers who are eligible for special programs like SAVE
- Cancel debt for undergrad borrowers who have been repaying for at least 20 years; cancel debt for grad borrowers who have been making their payments for at least 25 years
- Cancel debt for people who have gone through some type of hardship
- Cancel debt for qualified borrowers who have enrolled in what the White House refers to as "low financial value" programs
The White House adds that, in total, the Administration would provide debt relief to more than 30 million Americans, provided the new plan goes through.
ABC15 wanted to learn more about the program and its impacts, so we took your questions to Second Gentleman Mr. Emhoff, who was in the Valley this week.
ABC15's Nick Ciletti: "You were talking to educators just now. What were your takeaways?"
Second Gentleman Emhoff: "It was emotional. You heard from educators and professionals who availed themselves of debt relief and these are people who have been teaching 20, 25, or 30 years and carrying $50,000 or $100,000 worth of loans and couldn't get out from under them. Those were relieved and now, they can get a mortgage, invest in other things. It's good for the economy and more importantly, it keeps teachers in the profession."
Ciletti: "This is a criticism that the Administration has gotten before, in terms of using taxpayer dollars for student loan debt relief. There are people who say, 'Wait a minute - I didn't get a chance to go to school or I already paid off my loans' - so why should this person back that plan?"
Second Gentleman: "These are educators. Let's talk about these people - most of them are public servants. Millions of public servants who have taken on $10,000 or $50,000 or $150,000 worth of debt to teach our children - and it's a low-paying profession."
ABC15 also received questions from two viewers, Jolene and Thomas, wanting us to dive deeper into other plans the Administration may have.
Jolene's main concern was about people who end up owing more because of interest than they did from the initial principle they took out.
Ciletti: "Because of the high interest rates, Jolene's concern was about the people who now owe more in interest than they did in the initial principle. This plan addresses it, but does it go far enough?"
Second Gentleman: "Jolene, thank you for the question. This plan is a big step to go far enough. We can do everything we can in the future, but in the future, to cancel $20,000 in loans in that high interest will make a huge dent for a lot of people."
Ciletti: "The last viewer e-mail we got was from a gentleman named Thomas who is a recent University of Arizona grad in engineering. His concern is that there is an underlying issue with the actual cost of college these days, which far outpaces inflation. His fear is that that is not being addressed and that this could be a problem that we have to do something else about in 20 years. What would you say to that?"
Second Gentleman: "It's a great concern because we need to make education accessible, especially in our state institutions. We have to do everything we can as a society to make sure college and higher learning is attainable and also, we have to have opportunities if you don't go to college - whether that's a trade school or community college, all these other things so that people can get out into this amazing economy that we have going on right now."
ABC15 asked the White House when the new plan would roll out and how many Arizonans would be impacted, and we are still working to get those answers.
Experts say the program will likely face legal challenges.
