Biden Plans to Forgive Student Debt: Moving Ahead

Adam Schultz, Public domain, via Wikimedia Commons

President Joe Biden recently announced that he is moving forward with plans to cancel student loans for another 160,000 borrowers, amounting to a total of $7.7 billion in debt owed through loans. Biden’s decision to cancel this debt comes at a crucial moment, only mere months away from a rematch election between him and former President Donald Trump in November.

Biden's first attempt at a large-scale cancellation of student debt was swiftly rejected by the Supreme Court, citing concerns about non-compliance with federal law relating to the matter. 

This new wave of debt relief will be delivered in three different categories to borrowers. Approximately 67,000 borrowers will be relieved through the existing Public Service Loan Forgiveness program, 39,000 people will be relieved through earlier income driven plans, and about 54,000 enrolled borrowers will be forgiven through Biden’s new income-driven repayment plan. In a statement released by the White House, Biden touted this move as characteristic of his “pro young people and working class” agenda.

In his statement he said “From day one of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to cancel student debt - no matter how many times Republican elected officials try to stop us.” Biden also spoke to past progress on the issue of student loan debt, stating “Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years. That includes providing the largest increases to the maximum Pell Grant in over a decade; fixing Public Service Loan Forgiveness so teachers, nurses, police officers, and other public service workers get the relief they are entitled to under the law; and holding colleges accountable for taking advantage of students and families.” With the latest cancellation of debt, the total tally of Americans impacted by Biden’s action on student loans is 4.75 million, 1 in 10 student loan borrowers, according to the U.S. Secretary of Education Miguel Cardona. 

The issue of student loans is high on the agenda of young people, a demographic that Biden needs the support of in the upcoming election. Young people across the nation have expressed concern about Biden’s age and mental acuity as well as his foreign policy in regard to the Israel - Hamas war. The Trump campaign and Conservative allies have criticized Biden’s actions on loan forgiveness, calling them unfair to taxpayers that previously paid off their debt or did not attend college in the first place. In fact, a group of 11 states, led by Kansas,  sued to block the White House’s Saving on a Valuable Education (SAVE) loan plan back in March. Then, another group of seven more states, this time led by Missouri sued on the same basis in April. Nonetheless, it remains a hot topic issue, especially amongst young people in the U.S. 

The concept of the federal government forgiving student debt has gone from a once radical concept to a political reality in the U.S. This comes as the cost of a college education has soared in recent decades, with data showing that the price of tuition doubles on average every nine years. During the pandemic, then President Donald Trump flirted with the use of emergency powers to forgive some student loan debt, and extended the pause on federal student loan payments and interest accrual through the end of 2020. Biden has taken this a step further, pursuing debt forgiveness on an unparalleled level, not without resistance from opponents and some of those in the legal space. 

Understanding who qualifies for the latest round of relief can be relatively confusing. President Biden’s recent efforts reflect his administration's ongoing outreach to young Americans struggling under economic weight in a post-pandemic society. While significant progress has been made, the path to broader debt forgiveness remains complex and fraught with challenges. As the administration continues to navigate these issues, millions of borrowers await further developments with hope and cautious optimism.