Why 2024 could be the year student loan borrowers get forgiveness

Nearly 40 million Americans would have gotten relief from Biden’s original student loan forgiveness plan.

The president’s Plan B is looking much narrower. That’s because the justices ruled in June that the first plan, which covered more than 90% of federal student loan borrowers, was too far-reaching.

“Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?” wrote Chief Justice John Roberts in the majority opinion for Biden v. Nebraska. “We can’t believe the answer would be yes.”

The new forgiveness policy will include only a small share of borrowers, said Luke Herrine, an assistant professor of law at the University of Alabama.

“I think it would be easier to justify in front of a court that is skeptical of broad authority,” Herrine said in an earlier interview with CNBC.

The Biden administration seems focused on still delivering relief to specific groups of borrowers, according to a recent paper issued by the U.S. Department of Education. Those are:

1. Borrowers with current balances greater than what they originally borrowed
2. Those who entered into repayment on their undergraduate student loans 20 or 25 years ago
3. Students who attended programs of questionable value
4. Borrowers eligible for existing relief programs, including Public Service Loan Forgiveness, who just haven’t applied or perhaps didn’t know about those options
5. Debtors in financial hardship

Altogether, it’s possible somewhere between 4 million and 10 million borrowers will be eligible for the revised forgiveness program, said higher education expert Mark Kantrowitz. It’s hard to know this figure,…