Exclusive: New Biden student loan plan unveiled amid agency funding crisis
The Biden administration is unveiling an ambitious new student loan repayment program today that will be more generous, flexible and forgiving than previous plans — but it's unclear how or when the administration will be able to fully implement it.
The U.S. Department of Education says proposed updates to its income-driven repayment plan would, among other things, cut loan payments in half for undergraduate borrowers, but its rollout could be complicated by the fact that the Office of Federal Student Aid (FSA) — the agency that oversees the government's student loan portfolio — is in an unexpected funding crisis, created by a political fight between Congressional Republicans and Democrats, and the White House.
Behind closed doors, officials at FSA and the U.S. Department of Education are surprised and angry, sources tell NPR, because they must now safeguard priorities like today's announcement while also scrambling to find hundreds of millions of dollars to cut from other current and future programs.
In December, Congress approved a massive, $1.7 trillion government funding bill known as an "omnibus," but the bill did not deliver nearly enough money for FSA to do everything it has been asked to do in 2023 — by Congress, the Biden administration and even the courts.
A "big f***ing deal" is how one federal official describes the surprise decision, last month,
