In its waning days, the Biden administration withdraws rules that would have impacted more than 25 million borrowers
Tens of thousands of public servants will have $4.28 billion in student debt canceled, the Biden administration announced Friday, even as the Education Department pulled the plug on plans for broader debt relief.
The announcements come roughly a month before President Joe Biden will leave the White House. Though President-elect Donald Trump hasn't said much about how he would approach student loans, it's unlikely he would continue with Biden's agenda on the issue. Biden's move to withdraw the rules on mass debt forgiveness could help prevent the Trump administration from rewriting them.
During his time in office, Biden took big swings at student-loan reform, but they were largely stymied by opponents. In documents withdrawing rules that would have canceled debt for more than 25 million borrowers, the Education Department said it was scrapping its plans because it wouldn't be able to implement them.
"With the time remaining in this Administration, the Department is focused on several priorities," agency officials wrote in the documents. They added that "the Department at this time intends to commit its limited operational resources to helping at-risk borrowers return to repayment successfully."
Persis Yu, the deputy director of the Student Borrower Protection Center, an advocacy group, called the decision to withdraw the rules "heartbreaking" but also necessary.
"Where things can't cross the finish line right now, it's important for the administration to do what they can to protect borrowers going forward," she said.
Even as Biden struggled to expand the categories of borrowers eligible for debt forgiveness, he did push through nearly $180 billion in student-debt relief for 4.9 million borrowers. The loan forgiveness for 55,000 borrowers announced Friday is the latest round of debt cancellation in this years-long effort by the Biden administration to streamline debt-relief programs that predate Biden's time in office.
The group of borrowers who qualify for the relief announced Friday are part of the Public Service Loan Forgiveness program. The initiative, signed into law in 2007, allows borrowers working for the government and certain nonprofits to have their federal student loans wiped out after 10 years of payments. For years, PSLF was notoriously hard to access even for borrowers who appeared to qualify. In 2021, the Biden administration took steps to eliminate paperwork and other technical challenges that had stymied borrowers' paths to relief.
"From Day 1 of my administration, I promised to make sure that higher education is a ticket to the middle class, not a barrier to opportunity," Biden said in a statement announcing the debt cancellation. "Because of our actions, millions of people across the country now have the breathing room to start businesses, save for retirement and pursue life plans they had to put on hold because of the burden of student-loan debt."
The bulk of the $180 billion in student-debt cancellation came through programs that were on the books before Biden took office, including PSLF and an initiative that allows borrowers with severe disabilities to have their federal student loans wiped out. Under Biden, the Education Department made it easier for borrowers to actually access the debt cancellation they were entitled to under the law.
It's possible the White House could announce more relief through these initiatives before Biden leaves office. But Trump is unlikely to continue these efforts once he takes office next month.
Even among the 4.9 million borrowers approved for loan relief by the Biden administration, there are many for whom the debt has yet to disappear. Some borrowers who were scammed by their schools received notice from the government years ago that their debt would be wiped out, but are still waiting. Out of fear that the Trump administration won't follow through on the Biden administration's promise to cancel their debt, those borrowers and their advocates are urging the current administration to move quickly to cancel their debt.
Other borrowers who are months away from having their student loans wiped out through other programs, including PSLF, have also expressed concern that Trump's Education Department could impede their progress towards relief. Meanwhile, federal courts have blocked SAVE, the Biden administration's repayment program.
-Jillian Berman
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