Biden canceled less than 1% of the student debt crisis
- So far, Biden has written off $9.5 billion on the $1.7 trillion student debt crisis, or less than 1%.
- If he continues at this rate, Biden could cancel just under 5% of total student debt by 2024.
- He has yet to cancel student debt broadly – something many Democrats are calling for.
Over the past two weeks, President Joe Biden has made headlines for canceling student debt for defrauded borrowers and borrowers with disabilities, bringing total debt cancellation since taking office to 9.5 billions of dollars. That’s about 0.6% of the $1.7 trillion student debt crisis.
If this continues unabated, Biden will be on track to cancel about 4.8% of total student debt by the end of his term.
When campaigning for president, Biden promised to reform the student loan system. This included fixing flawed forgiveness programs, like the Public Service Loan Forgiveness Program (PSLF), as well as canceling $10,000 of student debt per borrower. While the Department of Education is rolling out reforms to the PSLF and other rebate programs, as Insider reported, the president has yet to follow through on his promises to cancel school. the debt.
Dan Zibel, chief attorney and co-founder of Student Defence, which works to advance student rights, told Insider that there are “many outstanding issues,” such as PSLF reform and student accountability. old schools that defrauded students.
“I think there’s a lot to come,” Zibel said. “And I think there are still unanswered questions from the administration about whether they will take broader action.”
Biden only carried out targeted student debt cancellation
The $9.5 billion that has been canceled for borrowers so far has only gone to those who were already eligible for relief. To date, borrowers defrauded by for-profit schools have gotten $2.6 billion in aid because Education Secretary Miguel Cardona overturned a Trump-era methodology that denied the cancellation of debt to eligible borrowers.
Disabled borrowers also received nearly $7 billion in student debt relief. Before Cardona, borrowers with disabilities who wanted loan forgiveness had to go through administrative hurdles to qualify, including submitting documentation proving their income and going through a three-year monitoring period.
Cardona waived the paperwork requirement “indefinitely” on August 19 to make the process “as easy as possible for borrowers who need help.”
The debt cancellation that has occurred so far has been important in helping borrowers who previously qualified for relief, but it still leaves 45 million Americans in debt, fearing they will never repay.
“I’ve paid off almost all of my loans, but I still owe the full amount,” a borrower previously told Insider. “It’s an endless cycle.”
What’s Next for Student Debt Cancellation and Reform
The Departments of Education and Justice have for months been reviewing Biden’s legal authority to cancel student debt of $50,000 per borrower — something many Democrats are calling for — but there’s no betting update on the status of these reviews.
In the meantime, the Ministry of Education has received feedback on what reforms it should make to the student loan system and is taking steps to implement new rules in the system, which could take years. Advocacy organizations, such as the Center for the Protection of Student Borrowersare pushing for reforms to the PSLF, which Biden has yet to act on, while Massachusetts Senator Elizabeth Warren, Senate Majority Leader Chuck Schumer and other Democrats are leading the campaign for a full-scale cancellation debt.
“The president has the power to forgive $50,000 in student loan debt right now,” Massachusetts Warren previously told Insider. “Senator Schumer and I will continue to push for this, but Biden doesn’t need any authorization from Congress. He needs to pick up the pen and do it himself.”
The pandemic freeze on student loan repayments lifts in February, and with many borrowers worried about their ability to restart payments, some see debt forgiveness as the only viable form of relief.
Do you have a story to share about student debt or concerns about paying off your loans? Email Ayelet Sheffey at [email protected]