Biden’s plan to give millions of student-loan borrowers who fell behind on payments a fresh shot at debt relief is working
Ayelet Sheffey
May 15, 2023
Biden announced a “Fresh Start” plan to return borrowers behind on payments to good standing before reentering repayment.
Data from the New York Fed found less than 1% of borrowers are in default due to the plan.
The Education Secretary recently confirmed that payments will resume this year, with or without broad debt relief.
We just got another sign that President Joe Biden’s plan to restore student-loan borrowers behind on payments to good standing is working.
The New York Federal Reserve recently released its report on household debt and credit for the first quarter of 2023 — and it reported some promising signs for Biden’s latest reforms to the student-loan industry. Specifically, it took a look at the impacts of Biden’s “Fresh Start” plan, first announced in April 2022, that aimed to return about 7.5 million borrowers in delinquency or default on their student loans into good standing before they would have to reenter repayment. This would allow them to take advantage of federal relief programs, like income-driven repayment plans and Public Service Loan Forgiveness.
