President Biden made sweeping promises on student loan forgiveness in his push to get elected, but some experts say the amount of forgiveness achieved so far is not nearly enough.
For starters, Democratic Senators Elizabeth Warren and Chuck Schumer went on record to say that Biden should forgive up to $50,000 in student loans per borrower nationwide, and that clearly has not come to fruition. Biden has also proposed $10,000 in student loan forgiveness per borrower, but it doesn’t appear that he has the legal authority to forgive student loans on his own.
That said, the administration has made some gains in terms of fixing our student loan debt crisis — at least for some borrowers. In fact, we have already seen billions of dollars in student loans forgiven during the Biden presidency.
Here’s a rundown of everything this administration has accomplished in terms of student loan forgiveness so far.
Borrower Defense To Repayment
Borrower defense to repayment is a provision for federal student loans that lets borrowers have their loans discharged if a school misled them or engaged in other predatory misconduct. While the Trump administration did little to help borrowers who were likely eligible for forgiveness through this provision, the Biden administration settled a class action lawsuit in this realm that will ultimately lead to billions of dollars in loan forgiveness for more than 200,000 individuals who attended 153 specific institutions of higher education.
While the original class action lawsuit that was filed applied to borrowers who previously applied for a borrower defense to repayment discharge, those who think they might qualify can still submit an application by visiting the U.S. Department of Education website.
Closed School Discharges
Federal student loans also come with a provision that says debt can be discharged if a school closes while a borrower is enrolled, as well as within a certain time frame after they withdraw. There are other loan discharge criteria to meet as well, which are spelled out clearly on the U.S. Department of Education website.
Either way, the Biden administration has already been able to discharge student loan debt for approximately 115,000 borrowers who attended ITT Technical Institute (ITT) before its closure. According to a press release, this move alone led to approximately $1.1 billion in student loan forgiveness for affected borrowers.
Public Service Loan Forgiveness
The Biden administration also announced a temporary PSL
A press release says this action may lead to up to $11.5 billion in loan cancellation and summarizes the waiver with the following:
“A limited PSLF waiver that allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan. This waiver will allow student borrowers to count all payments made on loans from the Federal Family Education Loan (FFEL) Program or Perkins Loan Program. It will also waive restrictions on the type of repayment plan and the requirement that payments be made in the full amount and on-time for all borrowers.”
Total And Permanent Disability Discharge
In March of 2021, the Biden administration also announced relief for some borrowers who applied to have their student loan debt forgiven due to disability. This relief should lead to the cancellation of student loan debt for more than 230,000 borrowers, including 41,000 borrowers who had their loans reinstated after applying for this discharge. Thanks to this move, these borrowers will have their loans discharged once again, and any payments they have made during the COVID-19 emergency relief period will be refunded.
“Borrowers with total and permanent disabilities should focus on their well-being, not put their health on the line to submit earnings information during the COVID-19 emergency,” said Education Secretary Miguel Cardona in a press release. “Waiving these requirements will ensure no borrower who is totally and permanently disabled risks having to repay their loans simply because they could not submit paperwork.”
The Bottom Line
While the current administration may not have forgiven as much student loan debt as they hoped to so far, they are making progress. It’s important to note, though, that this progress comes by fixing existing programs. No new laws or executive orders have been passed – all of this loan forgiveness is simply providing borrowers with the discharge of their student loans that they deserve under current laws, but had been held up because of poor government bureaucracy.
Most experts agree that the President does not have the legal authority to forgive student loans through executive action alone. As a result, broad student loan forgiveness plans would have to pass both houses of Congress, which seems incredibly unlikely at the moment. There may be some other regulatory means to forgive student loans, but it’s also a tough path.
Either way, borrowers with most federal student loans have had a long break from making payments and accruing interest since the Covid-19 emergency began in March of 2020. The current deferment period is set to expire on August 31, 2022 as of now, but it’s likely to be extended once again until past the midterm elections.
We’ll have to wait and see whether any other forgiveness measures are put into place for the remainder of the year and into next year. While broad student loan forgiveness is unlikely to happen any time soon, it’s possible the administration has plans to help more borrowers while they can.
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