Federal Government Proposes Student Loan Bailout for 8 Million Borrowers

The Education Department said the proposed rule would benefit those with medical bills, child care costs, and other financial hardships.

Student loan debtors hold a rally in front of the White House to celebrate the federal government's intent to cancel student debt, which was later blocked by the Supreme Court, on Aug. 24, 2022. Paul Morigi/Getty Images

The U.S. Department of Education said on Oct. 25 that a new set of rules, if finalized, would cancel student loan debts for about 8 million borrowers facing “financially devastating hardships,” even as a court order blocks its implementation.

The Education Department defines hardship as an event or situation “likely to impair the borrower’s ability to fully repay the loan or render the costs of continued collection of the loan unjustified.”