President Biden conspicuously didn’t answer, during his Year One news conference, when asked whether he still stands by his promise to cancel $10,000 in federal student loans for those who attended public colleges and universities.
Already, the Biden administration has wiped out nearly $13 billion of student debt, using forgiveness programs such as those for borrowers in public-service jobs. It’s a sharp contrast to the Trump administration, which delayed and opposed loan forgiveness basically every which way it could.
Americans owe about $1.7 trillion in student debt — a more than 90 percent increase from about a decade ago — with some $1.4 trillion owed to the federal government. As Josh Mitchell details in “The Debt Trap,” government-backed loans originated as a well-meaning attempt to make college more accessible by providing better terms for borrowers than private options.
As college costs rose significantly in recent decades, so did the number of Americans seeking advanced degrees in hopes of earning a living wage. Enrollment in private, for-profit institutions also climbed in the decade leading up to the Great Recession. Many borrowers, especially those who never received a degree, found themselves unable to keep up with both their payments and living expenses. Before the pandemic prompted a suspension on loan payments, about 20 percent of borrowers were in default.
The result? Millions of Americans — young, middle-aged and elderly — are trapped in a cycle of debt that reaches into retirement savings, marriage plans and family relations. Late last year, the Biden administration extended until May a pandemic-driven pause on federal student-loan repayments. But advocates are again asking the administration to outright cancel more debt — just as candidate Biden promised.
It’s unclear whether Biden has the power to cancel such debt. Some say the Higher Education Act gives Biden the authority to effectively erase these debts. Others disagree. If the administration authorizes a blanket forgiveness, the issue is all but certain to head to the courts.
counterpointBiden is trying to buy votes with student debt relief
Still, many activists and politicians are clamoring for Biden to keep his campaign promise — and more. Sen. Elizabeth Warren (D-Mass.), who ran for president on a promise to forgive up to $50,000 in student debt, is co-sponsoring legislation with Senate Majority Leader Charles E. Schumer (D-N.Y.) to do just that. “With a stroke of his pen, the president can #CancelStudentDebt and give relief to 40 million Americans,” she recently tweeted — keeping the pressure on Biden.
This debate over forgiveness obscures actions Biden is actually taking, such as through the Public Service Loan Forgiveness program. In November, the administration notified 30,000 borrowers they could receive relief under expanded eligibility. The program was created to offer forgiveness to borrowers after they make 10 years of on-time payments while working in public service (read: often low-paying) jobs. But the legislation was written badly, and for too long borrowers received misleading and even wrong information from loan processors about how to qualify.
Even as the situation garnered reams of negative publicity, the Education Department during the Trump years put roadblock after roadblock in the way of teachers, firefighters and others simply asking the government to keep its financial promise.
The Biden administration also forgave the debt of more than 300,000 severely disabled borrowers in August.
And Team Biden is moving aggressively to clear the backlog of borrowers seeking loan forgiveness after attending predatory and dodgy for-profit institutions of higher education, such as the now-defunct Corinthian Colleges. Education Department rules allow students who believe they were defrauded by their college to seek forgiveness of government debt. But during the Trump era, the Education Department’s foot-dragging on an order to stop collecting on loans made to Corinthian students was so egregious it prompted a federal judge to remind department officials she had the power to jail them.
Meanwhile, the Biden administration is also reportedly revising bankruptcy policy for federal student loans. Decades of legislation — some spearheaded by Biden when he was in the Senate — made it nearly impossible to receive relief from overwhelming student debt in the bankruptcy courts. (In one case, lawyers for the Education Department argued that a woman’s teenage son should get an after-school job to help pay back her debt.) Richard Cordray, the former head of the Consumer Financial Protection Bureau now working on student debt issues, told Congress in October that the administration is reframing guidelines to make it easier for financially hard-up borrowers to discharge their loans in court — a change some of us have advocated for years.
Instead of leaving the room when asked about student loans, Biden should tout his accomplishments in improving the lives of those who owe money for their college educations. No, these policy and regulatory changes are not as sexy as wiping out debt. But they demonstrate how the Biden administration is better for ordinary Americans than Donald Trump and Republicans. And we all need to hear it.