Before President-elect Donald Trump takes office, some Democratic senators are putting pressure on the Biden administration to take additional steps on student loans, including completing some debt forgiveness that has already been granted.
Trump hasn’t made any specific pledges regarding student loans, but he hasn’t prioritized debt cancellation like President Joe Biden has. Biden has authorized the discharge of more student loans than any other president, despite the Supreme Court’s decision to invalidate his main proposal last year.
Biden’s attempts to offer widespread student loan relief have drawn criticism from many Republicans who believe it is unjust to shift the burden on taxpayers who have already paid for their education or who chose not to attend college.
Before President-elect Donald Trump takes office, some Democratic senators are putting pressure on the Biden administration to take additional steps on student loans, including completing some debt forgiveness that has already been granted.
Trump hasn’t made any specific pledges regarding student loans, but he hasn’t prioritized debt cancellation like President Joe Biden has. Biden has authorized the discharge of more student loans than any other president, despite the Supreme Court’s decision to invalidate his main proposal last year.
Biden’s attempts to offer widespread student loan relief have drawn criticism from many Republicans who believe it is unjust to shift the burden on taxpayers who have already paid for their education or who chose not to attend college.
A large portion of the debt relief that Biden finally approved was provided through student loan forgiveness programs that existed before his administration and was intended for particular borrower categories.
However, Democrats are worried that some borrowers are still awaiting the debt discharge that the Biden administration authorized, especially those who were duped by their institutions.
At a press conference earlier this month, Massachusetts Democrat Sen. Ed Markey stated, “These borrowers set out to pursue the American dream, but instead of earning a diploma that unlocked the doors of possibility, they found themselves being shackled with a worthless degree and the burden of student loan debt.”
Some student loan forgiveness for deceived borrowers who qualified for relief was slowly implemented by Trump’s administration throughout his first term in office.
Before January 20th, Inauguration Day, dozens of Democrats are requesting that the Biden administration do the following.
Officially deliver student loan forgiveness promised to misled borrowers
For about 1.6 million students who were deceived by their colleges, the Biden administration has granted nearly $29 billion in student loan forgiveness; nevertheless, many of them are still awaiting the discharge of their loans.
Processing some of the debt relief has taken longer than anticipated, and the Department of Education has authorized a number of large group discharges for borrowers who attended for-profit college networks, such as Corinthian Colleges, the University of Phoenix, and The Art Institutes, since Biden took office.
A court filing stated that as of this fall, approximately 135,600 former Corinthian students who had been granted debt relief were still awaiting the discharge of their loans, and that the discharges for the remaining borrowers had “proven more complicated,” in part due to their consolidated loans.
More debtors might be awaiting cancellations and reimbursements for money already paid. In an early December letter, over 70 Democrats urged the department to “immediately process debt relief for these borrowers.”
The borrower defense to repayment program, which offers debt discharges to borrowers who were deceived by their colleges, authorized the relief.
Lawyers anticipate that the Department of Education will still have to handle the discharges even if they weren’t done prior to the administration change.
The first Trump administration handled debt relief approved by the Obama administration, according to Eileen Connor, president and head of the Project on Predatory Student Lending, which represents students who have been scammed by their universities.
However, Betsy DeVos, the Education Secretary at the time, stated in her letter that she was approving the cancellations “with extreme displeasure.”
By using borrower defense, authorize additional student loan forgiveness.
There is some fear that the incoming Trump administration may alter borrower defense regulations and slow down the processing of outstanding claims, so some lawmakers are pleading with the Department of Education to authorize more group discharges under borrower defense, claiming that other schools have been found to have deceived or committed fraud, making some other former students eligible for relief under borrower defense.
Rep. Bobby Scott, a Democrat from Virginia and a prominent member of the House Education and Workforce Committee, wrote a separate letter to the department last month, saying, “If they have their way, it will be significantly harder – and possibly impossible – for these borrowers to receive relief under the Trump-Vance Administration.”
In an effort to restrict the assistance that may be provided through the program, the Department of Education also tried to alter the borrower defense regulations during the first Trump administration. Despite the proposal’s failure, the government ceased handling borrower defense claims while battling legal challenges. Consequently, a backlog of almost 200,000 claims accumulated.
Give borrowers who are in legal limbo alternatives.
Approximately 8 million borrowers are enrolled in a scheme that is now on hold because of litigation, and Democrats are urging the Department of Education to make it simpler for them to make payments and be eligible for debt relief.
The Biden administration introduced the proposal last year under the name SAVE (Saving on a Valuable Education). However, two groupings of Republican-led states are contesting it in court, claiming the president has the power to carry out the plan. The 8th US Circuit Court of Appeals is anticipated to rule soon.
Since the Department of Education placed SAVE borrowers in an interest-free forbearance as a result of the litigation, they are not currently required to make payments. Although this is good news for many of the affected borrowers, it may cause some of them to postpone the forgiveness of their student loans.
This is due to the fact that time spent in forbearance will not be counted toward the number of payments needed to qualify for debt relief under programs such as Public Service Loan Forgiveness, which eliminates any outstanding debt for qualified public sector employees, such as teachers and nurses, following 120 qualifying payments.
In order to begin making payments that count toward debt reduction, borrowers were permitted to transfer to two previous repayment programs as of last week, according to the Department of Education: Pay As You Earn, or PAYE, and Income-Contingent Repayment, or ICR.
For borrowers who might have recently reached 120 eligible payments, Scott also asked the agency to finalize any PSLF releases.