Biden Canceled 1 Million Student Loans
He's aggressively using relief for public service workers.
AP (“The Biden administration has canceled student loans for more than 1 million in public service jobs“):
A student loan cancellation program for public service workers has granted relief to more than 1 million Americans — up from just 7,000 who were approved before it was updated by the Biden administration two years ago.
President Joe Biden announced the milestone on Thursday, saying his administration restored a promise to America’s teachers, firefighters, nurses and other public servants. He celebrated it even as his broader student loan plans remain halted by courts following legal challenges by Republican-led states.
“For too long, the government failed to live up to its commitments,” Biden said in a statement. “We vowed to fix that, and because of actions from our administration, now over 1 million public service workers have gotten the relief they are entitled to under the law.”
In total, the administration says it has now canceled $175 billion for about 5 million borrowers using several existing programs. Public Service Loan Forgiveness accounts for the largest share of that relief, while others have had their loans canceled through income-driven payment plans and through a 1994 rule offering relief to students who were cheated by their schools.
The administration’s fiat cancellation of student loans has been stricken down by the courts multiple times, but this particular tranche may well be safe.
The Public Service Loan Forgiveness program was created in 2007, promising college graduates that the remainder of their federal student loans would be zeroed out after 10 years working in government or nonprofit jobs. But starting in 2017, the vast majority of applicants were rejected because of complicated and little-known eligibility rules.
A 2018 report from the Government Accountability Office found that 99% of applicants were denied, often because they weren’t in the right loan repayment plan or because their payments had temporarily been paused through deferment or forbearance — periods that weren’t counted toward the 10 years of public work.
The GAO faulted the Education Department for failing to make the rules clear.
The program was the subject of legal and political battles, with Democrats in Congress calling on the Trump administration to loosen the rules and uphold the spirit of the program. Betsy DeVos, the education secretary at the time, countered that she was faithfully following the rules passed by Congress.
Declaring that the program was “broken,” the Biden administration in 2021 offered a temporary waiver allowing borrowers to get credit for past periods of deferment or forbearance, among other changes. A year later, the Education Department updated the rules to expand eligibility more permanently.
Since then, waves of borrowers have been approved for cancellation as they reach the 10-year finish line. On Thursday, 60,000 more hit the mark, pushing the total past 1 million. When Biden took office, just 7,000 borrowers had been granted relief over the previous four years.
I do not claim expertise on the finer points of the law surrounding student loans, never having taken one. But, to the extent Congress passed a law granting relief to those who performed 10 years of work in eligible fields and folks were being denied said relief because of bureaucratic pettiness, it would certainly seem within Biden’s power to order more lenient interpretation.
Republicans in Congress slammed Biden for working to forgive loans rather than make college less expensive.
So, it’s not obvious what power the President has to set prices at private and state-run institutions. Aside from the service academies, we don’t have much in the way of federal universities. Further, to the extent Congress passed a law incentivizing public service with student debt relief as a carrot, Biden would seem to be following the law. (Offhand, my preference would be to count loan payments during the term of public service as paid and then wipe away any remaining debt at the 10-year mark rather than requiring payment during those 10 years. That would certainly be a much stronger incentive.)
“The Biden-Harris administration is circumventing Congress to shoehorn graduate degree holders and high-income borrowers into a program they were never eligible for and forcing hardworking Americans to pay for it in the process,” said Virginia Foxx, R-N.C., chair of the House Education and the Workforce Committee.
If so, then Congress should definitely sue to stop him. Biden is required to faithfully execute the law, not ignore it.
In all, the program has now erased $74 billion in loans for public workers.
“I want to send a message to college students across America that pursuing a career in public service is not only a noble calling but a reliable pathway to becoming debt-free within a decade,” Education Secretary Miguel Cardona said in a statement.
The milestone was applauded by supporters of student loan cancellation, including the nonprofit Young Invincibles.
“This program is essential to bring new workers into the important roles of public service and reward their contributions,” said Kristin McGuire, the group’s executive director. “After years of very little forgiveness through PSLF, one million borrowers free from debt is a massive achievement.”
As a matter of public policy, I’m skeptical that the program, as designed, is all that effective. My strong guess is that we’re simply giving debt relief to people who already wanted to be teachers and the like. But if that’s how the law is written, I have no objection to Biden aggressively following it.
My son went to McGill in Canada. The way their tuition is set is by a formula that takes into account worth to society and eventual salary. So although science and engineering is worth a lot to society, they are still the most expensive tuitions, while social work and teachers cost the least. In addition, they lock in the tuition as soon as you start, so my son’s cost for science was roughly $30k US (and $1k more for full health benefits) per year, and that never went up. Finally, Canadians pay substantially less than foreigners, Quebecois yet less, and Montrealers the least. On top of all that, any foreigner that graduates from a Canadian University can get a three year working visa.
Not necessarily? The Roberts Court said Biden can ignore the law if he does so pursuant to his official duties, per the conservative Constitution — or, at least, he cannot be prosecuted for such behavior outside of the congressional impeachment process.
Not that Presidents weren’t already doing so here and there.
Lots of R pushback when loan forgiveness helps ordinary Americans. Not a peep from these Republicans when PPP loans (which were orders of magnitude larger amounts of cash) just magically went away.
The PPP program *should* have given money directly to the employees, rather than trickling it down through their employers. But we all know why they did it the way they did.
During the Republican Bush administration
This is known as administrative friction. Intentional bureaucratic hurdles designed to not let government work. A favorite tactic that is not exclusive to either party.
@Tony W:
You know the standard response from these Repubs and the corporate Dems similarly opposed: “We didn’t like that either, we just conveniently forgot to file lawsuits or otherwise speak up about it at the time.”
Yeah, like y’all always do when rich white folk receive the lion’s share of government largesee. Quelle surprise.
@DK: While I think the Roberts Court overreached in that decision, it’s largely irrelevant here. There have never been criminal charges filed against a President for exceeding the limits of the law. He can either be impeached, for gross violations, or taken to court to order specific redress.
@MarkedMan:
My daughter went to McGill, and it was cheaper than any of the UCs would have been (we live in the SF Bay Area) in spite of our out-of-the-country tuition. We have forever lost her to Canada, which is wonderful for her and a sad thing for our nation.