President Joe Biden has now supervised the cancellation of student loans for over 5 million Americans, more than any other president in American history, despite not fulfilling his pledge to provide widespread student loan forgiveness.
The Education Department made a last-minute step on Monday, cancelling loans for 150,000 borrowers through pre-Biden programs. His administration expanded such programs and employed them to their fullest extent, moving ahead with cancellation even after the Supreme Court rejected Biden’s plan for a new forgiveness scheme.
In a written statement, Biden said, “My Administration has taken historic action to fight on behalf of students across the country, hold bad actors accountable, and reduce the burden of student debt.”
The administration claims to have forgiven $183.6 billion in student loan debt overall.
When President-elect Donald Trump assumes office, the cancellation wave may stop. Although Trump hasn’t disclosed his exact student loan plans, he has previously referred to cancellation as “vile” and unlawful. Republicans have vehemently opposed Biden’s plans, arguing that taxpayers who have already paid back their loans or never went to college will ultimately bear the cost of cancellation.
Biden relaxed the debt forgiveness guidelines.
The borrower defense program, which enables students to have their loans cancelled if they are defrauded or misled by their universities, provides the majority of the most recent wave of relief. Although it was established in 1994, it wasn’t widely utilized until the Obama administration’s string of high-profile for-profit education scandals.
Public Service Loan Forgiveness, which was established in 2007 and offers to forgive all outstanding debt for borrowers in government or non-profit jobs who make ten years of monthly payments, and a program for borrowers with disabilities provided a smaller portion of the relief.
The majority of borrower defense cancellations on Monday were for students who attended a number of Center for Excellence in Higher Education-owned, now-defunct institutions, such as Independence University, Stevens-Henager College, and CollegeAmerica. They are predicated on earlier discoveries that the institutions misrepresented to potential students the conditions of private loans and their employment prospects.
Advocates opposed those programs before to Biden’s election, claiming that complicated regulations made it hard for borrowers to receive relief. In order to increase eligibility without consulting Congress, the Biden administration used its regulatory authority to modify some of the regulations.
For instance, prior to the Biden administration, only 7,000 borrowers have had their loans forgiven under Public Service Loan Forgiveness. A 99% rejection rate for applicants was caused by widespread misunderstandings regarding eligibility and mistakes made by loan servicers.
After years of payments, many borrowers discovered they were under an invalid repayment plan. Some had their loan servicers incorrectly place them in forbearance, which is a halt in payments. In the end, those times did not count toward the ten years of payments required for cancelation.
During the epidemic, the Biden administration loosened qualifying requirements briefly before making them more permanent in 2023. Consequently, the scheme has canceled out the balances of over 1 million public employees.
The purpose of all those regulation changes was to support Biden’s flagship student debt policy, which offered up to $20,000 in relief to over 40 million Americans. However, the Biden administration turned its attention to optimizing aid through already-existing systems after the Supreme Court halted the measure.
Republicans have demanded an alternative strategy.
Even as congressional conservatives charged Biden with abusing his authority, announcements of further cancellations became commonplace. Republican states fought off Biden’s later attempts at mass forgiveness, but the smaller batches of relief proceeded without any substantial legal challenge.
Biden’s reforms may be targeted for reversal when Republicans seize control of the White House and both houses of Congress. However, it is uncertain to what extent the incoming administration would tighten the cancelation spigot.
During his first time in office, Trump suggested doing away with PSLF, but Congress turned it down. The Heritage Foundation’s strategy for a second Trump term, Project 2025, calls for eliminating PSLF, reducing borrower protection, and lowering the generosity of repayment programs compared to current ones.
Republicans have indicated that undoing the improvements made by Biden will be a top priority. Rep. Virginia Foxx, R-N.C., released a report earlier this month criticizing Biden’s extension of borrower defense, claiming that he “tried to stretch every possible law” in order to keep his campaign pledges.
Foxx added, “the jig will finally be up” when Trump takes office.
Several private foundations provide funding for the Associated Press’s coverage of education. All content is the exclusive responsibility of AP. At AP.org, you may see a list of supporters, funded coverage areas, and AP’s guidelines for working with philanthropies.