President Joe Biden announced a new bid on Monday to provide federal student loan debt relief to millions of Americans, part of a patchwork of debt relief plans the administration has been stitching together since the Supreme Court struck down Biden’s biggest swing last summer. The new plan offered up on Monday won’t affect nearly as many people as the original plan — but it’s definitely the best workaround that the White House has come up with yet.
This time around, rather than canceling the loans themselves, the plan aims at forgiving the interest that has accrued, which leaves some borrowers in a deeper and deeper hole. Here’s how NBC News described who will be eligible:
Biden’s new plans are aimed at canceling runaway interest for millions of borrowers; nullifying debt for those who are eligible for but not yet participating in certain forgiveness programs, such as those in public service who’ve been paying off their loans for 10 years or more; borrowers of undergraduate or graduate loans who started paying off loans at least 20 or 25 years ago, respectively; borrowers enrolled in low financial value programs; and those experiencing hardships that prevent them from making loan payments.
The new policy would “fully eliminate accrued interest for 23 million borrowers, cancel the full amount of student debt for over 4 million borrowers, and provide more than 10 million borrowers with at least $5,000 in debt relief or more,” according to a White House fact sheet released Monday. That’s far short of the $400 billion in relief that was expected to wipe out the debt entirely for more than 20 million Americans. But again, it’s still better than nothing.
The focus on interest is a smart pivot for the administration, given the massive resistance that previous attempts to wipe out student debt wholesale has seen. In wiping out accumulated interest, allowing any remaining payments to go directly to the principle, many who have been drowning in debt may actually be able to pay back what they owe while avoiding accusations that the program is unfair to those who already paid their loans in full. And for those who owe more than they originally borrowed, this proposal would mean “they can finally get on with their lives, instead of their lives being put on hold,” as Biden put it in remarks Monday announcing the plan in Wisconsin.
The focus on interest is a smart pivot for the administration, given the massive resistance that previous attempts to wipe out student debt wholesale has seen
What makes his announcement doubly important is that it manages to be good policy and good politics. Biden’s campaign pledge to propose student loan debt relief to Congress was a major turning point in the debate over what to do about spiraling education costs in America. It’s a promise that many student loan holders, who saw repayments and interest rates totally frozen during the pandemic, have been keen to see brought to life, especially now that repayments have resumed. A recent poll found that almost half of voters say that canceling student loan debt is a “very” or “somewhat” important issue to them when they head to the polls in November, a number that skyrockets when you look at younger Democrats specifically.
Since the main relief effort was nixed last year, the administration has been scrambling to offer up proof that it’s trying to follow through on its plans even in the face of a hostile Supreme Court and do-nothing Congress. The result has seen the White House and Department of Education cobbling together a series of fixes that improve existing forgiveness programs, expanding eligibility for others, and creating all-new programs to help make monthly payments more manageable. All told, the administration has canceled over $140 billion worth of debt since Biden took office in 2021, according to the White House.
Coupled with Monday’s efforts, that’s starting to add up to real money. And being able to rack up wins is crucial considering how much Biden needs to keep younger voters in his camp at the polls this fall. Of course, though, Republicans are well aware of how much Biden needs this win and will likely try to throw another wrench in the works. Already several GOP-led states recently sued the Biden administration over the income-driven SAVE Repayment Plan, saying that doing so was overstepping his authority by sidestepping Congress. As strong a move as this is, though, it does bring up an important question: Why shouldn’t the federal government stop charging interest on student loan debt entirely? Currently, Congress sets the interest rates on student loans every spring, based on the current price of Treasury bonds. The rate increases from the Federal Reserve over the last few years have likewise affected the rate on student loans, but the current 5.5% fixed rate for undergraduate loans is still much better than many private loans you could take out. The best argument in favor of charging interest is that it’s a way to cover those loans that default, since there’s no collateral or credit score check required when applying for federal student aid. But the government is already losing money with the current system and, as you may have noticed, nothing broke apart during the pandemic years when rates were frozen. Further, tacking on interest only adds to the feeling of hopelessness that low-income Americans experience when paying the minimum does little to actually shift their balance owed. I understand that there are a lot of ways that Biden’s hands are tied when it comes to student loan debt relief. Monday’s effort is a good faith attempt to fight one-handed. Ideally, it’s the first step toward a world where student loans can be provided interest free for everyone.
Hayes Brown is a writer and editor for MS NOW. He focuses on politics and policymaking at the federal level, including Congress and the White House. 
