In a bid to provide much-needed relief to millions of Americans burdened by student loan debt, President Joe Biden has introduced a new plan that aims to forgive a significant portion of outstanding loans. This comes after his previous attempt was struck down by the Supreme Court last year.

The White House released the proposed plan on Monday, targeting five different types of borrowers who could benefit from the debt forgiveness. Officials estimate that over 30 million Americans could have part or all of their debt wiped out if the plan is approved.

During a speech in Wisconsin, President Biden described the plan as "life-changing" and emphasized that it would allow individuals the freedom to pursue their dreams without the constant strain and stress of overwhelming debt. He acknowledged that even for those who work hard and make loan payments, the amount owed often increases rather than diminishes.

However, it is important to note that while President Biden is promoting the plan, the Education Department has stated that the finalized version will be released in the coming months. This means that actual forgiveness of student loan debt is likely to be several months away, subject to potential legal challenges that may prolong the process further.

Outlined within the plan are the five types of borrowers who would be eligible for debt forgiveness:

1. Borrowers whose balance has grown due to high interest rates would be eligible to have up to $20,000 in interest cancelled if they owe more than the original borrowed amount. This forgiveness would be available to individuals earning less than $120,000 per year or couples earning less than $240,000, benefiting an estimated 25 million people.

2. Borrowers who qualify for existing forgiveness programs, such as the SAVE plan or Public Service Loan Forgiveness, but have not yet applied would have their debt automatically cancelled. This aims to address issues related to paperwork requirements, bad advice, or other obstacles. Approximately two million people would be eligible under this provision.

3. Borrowers who have been repaying undergraduate debt for at least 20 years or graduate school debt for 25 years would have their remaining debt entirely erased. This part of the plan would benefit an estimated two million borrowers.

4. The plan also seeks to cancel student debt for individuals who attended institutions or programs that lost eligibility to participate in the Federal student aid program or were found to have cheated or exploited students. Additionally, loans would be cancelled for graduates of those institutions who have low income in comparison to their student debt.

5. The plan would include a provision targeting borrowers experiencing financial hardships, with the Education Department creating an application process to forgive debt for those who can prove their difficulties. This section aims to assist individuals who are financially challenged and at risk of defaulting on their loans.

As the Biden administration highlights the need for comprehensive student debt relief, it is important to note that the specifics of the plan are yet to be finalized. While the proposed measures are expected to provide substantial relief to millions of borrowers, the release of the official plan and its implementation may still face potential obstacles and delays.