President Joe Biden
Biden is expected to outline the broad guidelines of the new proposal at a speech in Wisconsin. It is his second attempt at a major student debt cancellation plan. AFP

NEW YORK CITY -- President Biden is preparing to submit a new proposal aimed at reducing or eliminating student loan balances for millions of borrowers, marking his second attempt at large-scale loan forgiveness, The Wall Street Journal reported on Friday.

The President is planning to outline the broad guidelines of the new proposal during a speech on Monday in Madison, Wis., where he is expected to tour his administration's efforts at reducing student debt burden for millions of Americans, according to the Journal. A White House spokesman declined to comment.

This isn't Biden's first attempt at a wide-ranging loan forgiveness plan. Last year, the Supreme Court overturned his first debt cancellation plan, which would have wiped away up to $20,000 in student debt for borrowers making less than $125,000 a year.

But despite those obstacles, and even opposition in Congress, President Biden has continued aiming at student loan forgiveness, one of the issues his administration is relying on ahead of the 2024 elections.

The White House announced in late March that it would forgive $5.8 billion in student loans for around 78,000 public-sector workers across the U.S. Similarly, in February, he also canceled $1.2 billion for nearly 153,000 borrowers enrolled in a new repayment plan launched by the administration.

This relief is aimed at addressing the nation's $1.77 trillion in student debt.

"From day one of my Administration, I vowed to fix student loan programs so higher education can be a ticket to the middle class — not a barrier to opportunity," Biden said in an email to those whose debt had been forgiven in February.

Now, the proposed legislation is expected to outline several categories that would qualify borrowers for debt relief, including financial hardships, according to the Journal. For example, borrowers with high debt loads and low incomes could see their loan balances reduced or eliminated. It could also outline a path to relief for borrowers who have carried their debt for decades; who now owe more than their initial loan amount because interest has piled up; or who are eligible for relief through other federal programs, but haven't applied.

When it comes to student loan debt and access to education, Latino students— and minorities in general— see major disparities.

White non-Hispanic families in the U.S. have a median wealth of $188,200, compared with $36,100 for Hispanic families, according to data analyzed by the Brookings Institution. Because of reasons like this, in 2016, about half of Hispanic families weren't able to contribute anything to the costs of their children's education, UnidosUS reported.

At the same time, loan defaults (stopping loan repayment) tends to exacerbate long-standing wage, wealth and opportunity gaps. Around 29% of white borrowers default on their federal student loans compared to 40% of Hispanic borrowers and 50% of Black borrowers, according to The Pew Charitable Trusts.

Administration officials, according to The Wall Street Journal, expect that the final rule will be challenged in court, but they think they are on solid legal footing. The new approach, they argue, is more tailored because it outlines specific conditions for debt cancellation, a contrast with the more sweeping plan that was overturned by the Supreme Court.

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