In the course of the last month, the Biden administration has implemented $2 billion in student loan forgiveness for 30,000 borrowers.
Highlighting one borrower’s story, Education Secretary Miguel Cardona tweeted on Monday, “Overnight, one person’s student loan debt went from more than $40,000 to zero… And we are just getting started.”
Is additional student loan forgiveness in the works? Yes — but specific details remain somewhat ambiguous.
New Student Loan Forgiveness Expansion for Public Service Workers
Secretary Cardona’s tweet was specifically referencing the Biden’s administration’s new expansion of the Public Service Loan Forgiveness (PSLF) program. PSLF provides federal student loan forgiveness for borrowers who commit to public service careers, working full-time for public or nonprofit organizations. Under new changes that the administration announced in October, the Education Department is temporarily easing some of the confusing and complex rules governing the PSLF program, which will allow thousands of additional borrowers to become eligible for loan forgiveness.
According to the Department, officials have already determined that 30,000 borrowers will receive at least $2 billion in student loan forgiveness under the PSLF program expansion. The Department expects that thousands of additional borrowers may benefit as well in the coming months as they take certain steps such as consolidating their FFEL loans through the federal Direct loan program, or certifying their public service employment. The Department has suggested that an additional $2.82 billion in student loan forgiveness, on top of what has already been enacted, could be delivered to borrowers as the temporary PSLF waiver program continues to gain traction.
Other Student Loan Forgiveness Initiatives By The Biden Administration
The Biden administration’s student loan forgiveness initiatives are not just limited to the PSLF program. The Education Department has been implementing several other federal student loan forgiveness expansions as well, including:
- $1.5 billion in expanded federal student loan relief under Borrower Defense to Repayment, a program that cancels federal student loan debt for borrowers who have been defrauded by their school. The administration reversed a Trump-era policy that had permitted the Department to partially forgive federal student loan balances; the reversal of that policy will expand relief for approved Borrower Defense claims.
- $1.1 billion in student loan discharges for former students of ITT Technical Institutes, which collapsed in 2016. The student loan cancellation is being implemented under the Closed School Discharge program, which eliminates the federal student loan balances for borrowers who could not finish their degree due to their school’s closure.
- $5.8 billion in automatic federal student loan cancellation under the Total and Permanent Disability (TPD) discharge program. The TPD program provides relief for borrowers who have a medical condition that prevents them from maintaining substantial, gainful employment. The automatic federal student loan cancellation under the program will be available for borrowers who are already receiving Social Security disability benefits and have a disability review period of at least five years. The Department also is reversing $1.3 billion in loan reinstatements for TPD borrowers who had their previous disability discharges undone during the pandemic due to a failure to comply with administrative post-discharge monitoring requirements, which have been waived.
Is Broad Student Loan Forgiveness Coming?
Still, the billions of dollars in student loan forgiveness being enacted by the Biden administration amounts to only a tiny fraction of the $1.8 trillion in outstanding student loan debt. Borrowers, advocacy groups, and many Democrats in Congress have been urging President Biden all year to fulfill his campaign promise to enact broad cancellation of student debt. Advocates have been pushing for cancellation of $50,000 or more in student loan debt per borrower, but Biden has been resistant to this, and he has questioned whether he would have the legal authority to act alone, without Congress. Even $10,000 in student loan forgiveness, which Biden said he would support during his presidential campaign, would eliminate the student loan debt of up to 15 million borrowers.
Congress has not been able to pass any student loan forgiveness legislation, however. Earlier this month, Senate Majority Leader Chuck Schumer (D-NY) suggested it wouldn’t happen due to partisanship and the slim Democratic majorities in both the House and the Senate.
Last spring, the administration promised to release a legal memo outlining the potential authority Biden would have to unilaterally cancel student debt using executive action, without having to rely on Congress to pass legislation. That memo was never officially released, but student debt activists were able to obtain a heavily redacted version through a Freedom Of Information Act request. The redacted memo does not provide any conclusive insight about whether or not the Biden administration will implement mass student loan forgiveness. But it does add pressure, and suggests that while the memo was completed months ago, the administration has not acted or clearly expressed its intentions.
Progressives in Congress continue to push the Biden administration to broaden student loan cancellation. \There is an enormous amount of executive action that [the Biden administration] is sitting on that I think is underutilized,” including on student loans, Rep. Alexandria Ocasio-Cortez (D-NY) told the New York Times earlier this week. “Biden could do this stuff with a stroke of a pen,” she said, and his inaction “is just reminding us that he’s choosing not to.”
“Nearly 90% of student loan borrowers aren’t ready for payments to restart” in February, tweeted Senator Elizabeth Warren (D-MA) on Wednesday, citing a recent survey. “It’s time for @POTUS to use his existing authority to #CancelStudentDebt. Lifting the burden of debt will help families and jumpstart our economy. It\’s the right thing to do.”
But so far, despite Secretary Cardona’s public statements suggesting that much more student loan forgiveness is on the way, no one in the Biden administration is suggesting that wide-scale student loan forgiveness is imminent. Meanwhile, federal student loans are scheduled to resume repayment this winter, after the payment moratorium ends on January 31, 2022.
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