The Biden administration has now approved at least $16 billion in student loan forgiveness, according to the Department of Education, following last week’s announcement of newly approved eligible borrowers.
Biden’s ‘Targeted’ Student Loan Forgiveness
The $16 billion in student loan cancellation approved so far reflects the Biden administration’s “targeted” approach to wiping out student debt. Officials are trying to ease access to existing student loan programs by relaxing program requirements, expediting approvals, and expanding the pools of eligible borrowers.
The administration has approved $7.8 billion in federal student loan cancellation for more than 400,000 disabled borrowers under the Total and Permanent Disability (TPD) discharge program. Through its TPD discharge initiatives, the Education Department is providing automatic discharges for certain borrowers who are receiving Social Security Disability benefits. Officials also reversed the reinstatements of thousands of previously-discharged federal student loans under the TPD discharge program due to the failure of some borrowers to return paperwork related to post-discharge income monitoring, which had been a hallmark of the program for years. The Department has now suspended post-discharge TPD income monitoring indefinitely while it works on overhauling the underlying regulations.
The Biden administration has also provided $5 billion in student loan forgiveness for 70,000 borrowers through fixes to the Public Service Loan Forgiveness (PSLF) program. Called the “Limited PSLF Waiver,” the fix temporarily allows borrowers to get credit for payments made on non-qualifying loans or under inligible repayment plans.
The most recent wave of borrowers receiving loan forgiveness are eligible under the Borrower Defense to Repayment program, which can cancel the federal student loan for borrowers who were defrauded by their school. The Department announced last week that it had approved $415 million in Borrower Defense claims for 16,000 borrowers who attended ITT Technical Institutes, DeVry University, Westwood College, Minnesota School of Business, and Globe University. The Department had previously approved another $1.2 billion in federal student loan cancellation for borrowers who had attended ITT schools.
More Student Loan Forgiveness Is On The Way
Administration officials have suggested that more student loan forgivness is forthcoming.
In its statement last week, the Education Department indicated that it will continue to review and approve additional Borrower defense applications submitted by borrowers who attended the schools in question and can demonstrate that they were the victims of school misconduct.
Department officials have also indicated that another million borrowers are projected to benefit from the expanded PSLF program this year, both in the form of additional credit and actual forgiveness loan. The Limited PSLF Waiver program is set to expire on October 31.
Uncertainty Continues For Widespread Student Loan Forgiveness
While advocates for student loan borrowers have praised the administration’s efforts, some have noted that $16 billion amounts to a fraction of 1% of the outstanding student loan debt, and targeted relief does little to address what some refer to as a student debt crisis.
“It’s President’s Day and we’re calling on [President Biden] to #CancelStudentDebt,” tweeted Rep. Ayanna Pressley on Monday. Pressley has been one of the leading Democrats in Congress calling on Biden to use executive action to wipe out $50,000 or more in the federal student loan for every borrower, arguing that existing federal law gives him the power to act without new Congressional authorization.
Administration officials have expressed uncertainty that the president has such authority, and Biden himself — while supportive of some form of broad student loan forgiveness — has been resistant to relying on executive action to go beyond his administration’s more targeted relief efforts.
Advocates for borrowers are also pushing the administration to provide more paths for borrowers to obtain student loan forgiveness. Earlier this month, a coalition of advocacy organizations called on the Education Department to establish an “IBR Waiver,” similar to the PSLF Waiver program, that would provide a temporary opportunity for millions of borrowers to get credit towards loan forgivness under income-based repayment plans; Many borrowers lost crucial months or even years of credit due to the complexities of the current federal loan repayment system, forbearance steering, and loan servicer irregularities. And consumer protection groups are mounting an vigorous campaign to convince the Biden administration to follow on earlier suggestions that the Department would consider easing its broad to discharging federal student loans in bankruptcy.
So far, Biden officials have made no firm commitments.
Further Student Loan Reading
One Million Borrowers May Benefit From Expanded Student Loan Forgiveness Starting This Month, Says Biden Official
Student Loan Forgiveness: ‘We’re Going To Win’ Says Top Democrat, As Poll Shows Broad Support For Debt Cancellation
Untangling Student Loan Forgiveness: Who Qualifies For Three Complicated Programs For Public Service Workers
Is Student Loan Forgiveness Taxable In 2022? It’s Complicated.