US President Joe Biden speaks on October 15, 2021 in Storrs, Connecticut. (Photo by Brendan ... [+]
Advocates for student loan borrowers continue to push the Biden administration to enact mass, across-the-board student loan forgiveness. But there are several signs that this may not happen.
Student loan borrower activists, advocacy organizations, and Democrats in Congress have been engaged in a year-long campaign to convince President Biden to use executive action to cancel upwards of $50,000 of student loan debt (or more) per borrower. Biden himself has expressed opposition to such widespread student loan forgiveness and skepticism that he would have the legal authority to enact it. He had previously suggested that he would support $10,000 in broad student loan forgiveness, but was more ambiguous about whether he thought he could enact that through executive action.
Here’s where things stand with broad student loan forgiveness.
The Biden Administration Is Preparing For The Student Loan Payment Pause To End — And For Payments To Resume
As first reported by POLITICO, the Biden administration is currently working on detailed plans to transition millions of borrowers from the current national payment pause to the resumption of payments in February. These plans reportedly may include a massive outreach campaign, a generous grace period for missed payments, and streamlining of applications for new repayment plans. Biden had extended the ongoing student loan payment pause and interest freeze to January 31, 2022 earlier this year. The administration has repeatedly referred to this as the “final” extension of the payment pause.
The fact that the administration is devoting significant resources to preparing for student loan payments to start up again would suggest that Biden is not planning on wiping out everyone’s federal student loan debt. At the same time, given that neither $10,000 in across-the-board student loan forgiveness, nor $50,000, would eliminate all outstanding federal student loans for all borrowers, it’s not necessarily conclusive.
Recent Comments By Biden Administration Officials Suggest Student Loan Forgiveness Isn’t Happening
But other key Biden administration officials have suggested that broad student loan forgiveness may in fact be off the table. In public remarks last month, Richard Cordray, the Chief Operating Officer of Federal Student Aid at the Department of Education, suggested that the ongoing discussion of widespread student loan cancellation did a disservice for borrowers.
“Borrowers have been hearing a steady drumbeat about the possibility of loan forgiveness, either wholesale or piecemeal,” said Cordray. “We can expect that many, many borrowers will not be eager to return to repayment when they have been led to believe, or even to hope, that was never going to happen. Getting over that psychological hurdle with millions of Americans may be a much harder job than we know.”
Corday’s comments are not definitive as a final policy decision, but they do suggest that the administration is not planning on eliminating most borrowers’ outstanding student loan debt.
Student Loan Forgiveness Legal Memo Has Not Been Released
Several leading student loan legal experts have argued that the President has broad legal authority under existing federal statutes to enact mass student loan forgiveness using executive action (which would allow Biden to bypass Congress). But that argument is not universally accepted, and Department officials under the Trump administration reached the opposite conclusion.
In April, President Biden instructed attorneys at the Education and Justice Departments to review whether there is sufficient legal authority to cancel student loan debt on a mass scale through executive action alone. The White House had initially suggested that a legal memo outlining the conclusions of this review would be released within weeks. But six months later, there has been no such memo.
House Democrats have called on the President and Education Secretary to release the memo by the end of this week. If that doesn’t happen, advocates may view this as another sign that the administration is not planning on moving forward with broad student debt cancellation.
Biden Administration Is Focused On Targeted Student Loan Forgiveness
While the debate about mass student debt cancellation continues, the Biden administration has enacted over $11 billion in student loan forgiveness that will benefit hundreds of thousands of borrowers. The administration has accomplished this by using executive action to relax requirements or expand eligibility for key existing federal student loan forgiveness programs like Borrower Defense to Repayment, the Total and Permanent Disability (TPD) program, and, most recently, Public Service Loan Forgiveness (PSLF). The administration has also started working on a massive regulatory overhaul of these programs to enact more permanent changes.
These efforts could be a sign that the Biden administration is indeed interested in cancelling student loan debt, but rather than using executive action to wipe out massive amounts of student loans all at once — which could be subject to legal challenges in court — officials are trying to use existing programs to cover more borrowers. This may have the benefit of reducing the political costs and legal risks associated with sweeping student loan forgiveness, but would come at the cost of reaching fewer people.
Further Reading
Biden To Transform Public Service Loan Forgiveness With Huge New Changes: Key Details
Student Loan Forgiveness Changes: Who Qualifies, And How To Apply Under Biden’s Expansion Of Relief
These Borrowers Are Left Out Of Biden’s New, Expanded Student Loan Forgiveness
