President Joe Biden is set to announce a new effort to expand student loan relief for certain categories of borrowers, according to three anonymous sources familiar with the plans. This comes almost a year after the Supreme Court rejected the administration's initial attempt to cancel student debt for millions of college attendees.

The President will reveal the details of the plan on Monday in Madison, Wisconsin, home to the University of Wisconsin's flagship campus. While the specific federal regulations outlining the eligibility criteria for reduced or eliminated student loan debt will not be released right away, the plan has been in the works for months through a negotiation process at the Department of Education.

Following the Supreme Court's decision last year, President Biden entrusted Education Secretary Miguel Cardona with the task of finding a legal pathway to waive or compromise student loan debt in certain circumstances, using the authority granted under the Higher Education Act. Biden referred to the Court's decision as a "mistake" and vowed to continue his efforts to provide relief to borrowers.

The upcoming student loan relief plan is expected to extend federal assistance to new targeted categories of borrowers under the Higher Education Act. Administration officials believe that this approach has a stronger legal footing than the previous proposal that was struck down by a 6-3 majority in the Court.

President Biden's latest plan is anticipated to be more focused and specific than the previous one, which aimed to cancel up to $20,000 in loans for over 40 million borrowers. In recent months, the Education Department has presented its ideas to an outside panel of negotiators representing various stakeholders in higher education. The aim is to assist borrowers with the greatest need for relief, including those who may never be able to fully repay their loans.

Some of the targeted groups for assistance include individuals whose unpaid interest has grown larger than the original loan amount. Under the proposal, their balances would be reset to the initial principal balance by erasing up to $10,000 or $20,000 in interest, depending on their income. Additionally, borrowers who have been making loan payments for decades would have all remaining debt eliminated. For undergraduate loans, repayment for at least 20 years would qualify for cancellation, while other federal loans would require 25 years of repayment.

The plan also includes automatic loan cancellation for those who attended for-profit college programs that are deemed "low-value." Borrowers would be eligible if the average federal student loan payment among graduates was disproportionately high compared to their average salary during their enrollment in the program.

Furthermore, borrowers who are eligible for other forms of loan cancellation but have not applied would receive automatic relief. This includes programs such as Public Service Loan Forgiveness and Borrower Defense to Repayment, which have often been burdensome due to complex paperwork requirements.

In response to advocacy efforts, the Department of Education has introduced a category for borrowers facing "hardship." This provision would offer cancellation to those deemed highly likely to default within two years, as well as additional borrowers experiencing a wide range of financial difficulties.

The proposed student loan relief plan has undergone a series of hearings and is currently under review after the completion of the negotiation process in February. Before finalization, the Education Department will need to issue a formal proposal and allow for a public comment period.

This latest effort to provide student loan relief is part of a broader range of targeted initiatives by the Biden administration, including programs aimed at assisting public service workers and low-income borrowers. To date, the administration claims to have canceled $144 billion in student loans for nearly 4 million Americans through these various initiatives.