When President-elect Joe Biden was asked whether student loan cancellation figured into his economic recovery plan, he declared, “It should be done immediately.”
"[Student debt is] holding people up," Biden said on Nov. 16, 2020. "They're in real trouble. They're having to make choices between paying their student loan and paying the rent."
On the campaign trail, Biden had pledged to cancel at least $10,000 of student debt per person.
Additionally, we should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues. Young people and other student debt holders bore the brunt of the last crisis. It shouldn't happen again.— Joe Biden (@JoeBiden) March 22, 2020
One year later, while Biden has provided hundreds of thousands of borrowers with debt relief, that $10,000 promise remains unfulfilled. Here's a look at why — and what he has done.
Biden has focused on preexisting forgiveness programs
The Biden administration's approach to student loan relief began with improving, extending or expanding a handful of programs that were already on the books.
"We're working really hard to get students the relief that they're entitled to" through these preexisting programs, Undersecretary of Education James Kvaal told NPR on Friday.
While it's not loan forgiveness, Biden extended the pandemic pause on federal student loan payments; that pause is now slated to lift in February. His other actions essentially keep promises the U.S. government had already made to borrowers — rather than make new ones. For example:
- Total and permanent disability discharge: In August, Education Secretary Miguel Cardona announced that the department would erase the federal student debts of thousands of borrowers with permanent disabilities. A 2019 NPR investigation found that, even though eligible borrowers have been legally entitled to a full discharge of their loans, the process was so complicated that fewer than half were able to shed their debts. The latest data from the Education Department suggests that these changes will help at least 370,000 borrowers drop more than $6.5 billion in student debts.
- Borrower defense and closed-school discharge: The Biden administration has dramatically expanded efforts to help students who have been defrauded by for-profit colleges and/or whose schools have been forced to close. Defrauded students who previously filed “borrower defense” claims but were given only partial relief under Trump administration rules will now see the rest of their federal student loans discharged.
- Public Service Loan Forgiveness (PSLF): The program meant to forgive borrowers’ debts after 10 years of public service and steady loan payments has been notoriously stingy, with complex rules and serial mismanagement pushing out many eligible borrowers. In October, though, the department used its expanded pandemic authority to retroactively loosen those rules and give borrowers credit for disqualified loan payments. According to the department, the overhaul has already forgiven $2 billion in debts.
Through these efforts, the Education Department says it has discharged or is in the process of discharging roughly $12.7 billion in student debt, affecting more than 638,000 borrowers.
While these moves were cheered by borrowers and advocates, they were not without controversy. The top Republican on the House Education Committee, Rep. Virginia Foxx of North Carolina, decried the department's PSLF waiver, calling it "an abuse of executive authority" and "too significant of an issue" to act without Congress.
Broader loan forgiveness would be even more controversial.
In February, Sen. John Thune, R-S.D., responded to some Democrats' demand that Biden forgive as much as $50,000 in student debt per borrower by calling it "incredibly, fundamentally unfair" to students who have already repaid their debts.
Foxx agrees, telling NPR that borrowers have a responsibility to repay their student debts: "It's no different than having taken out a loan for a car that you then find you can't pay back or taking out a loan for a home that you can no longer pay for — or you choose not to pay for."
Many critics of broad loan forgiveness agree that the cost of college is out of control but insist that canceling student debts would simply address a symptom of the problem, not its cause.
"In fact, Democrats' 'solution' is likely to make things worse," Thune said on the Senate floor.
"What incentive will colleges have to restrain tuition growth if they think they can rely on the federal government to subsidize their students' tuition fees through loan forgiveness?"
Advocates and borrowers aren’t satisfied with Biden’s actions so far
While many Republicans have resisted calls for debt cancellation, many Democrats and advocates for student loan relief are growing restless. To them, Biden's $12.7 billion in debt relief so far is a rounding error, considering that nearly 46 million Americans have $1.6 trillion in federal student loans. And he campaigned on doing more — again, $10,000 per borrower.
"That was a pretty clear promise that he made during the campaign," says Persis Yu, policy director at the Student Borrower Protection Center. "And certainly, that is a promise that I think many borrowers are right now waiting for him to fulfill."
Yu also says keeping that promise would make a huge difference, especially for borrowers already in default. "Roughly 16 million borrowers would have their entire debts extinguished, and that amounts to roughly two-thirds of the borrowers who are in default."
"Crumbs' worth of action." That's how Jalil Mustaffa Bishop describes the Biden administration's efforts thus far. The assistant professor at Villanova University studies inequities in higher education.
Mustaffa Bishop says the student loan system badly needs an overhaul, especially "for groups that historically have been marginalized and had to experience generations of different types of debt traps," from sharecropping to subprime mortgages to payday lending. Student loans are no different.
Mustaffa Bishop co-authored a recent survey of nearly 1,300 Black borrowers. The report, "Jim Crow Debt," produced in partnership with the Education Trust, unpacks how pervasive racial inequities, including widespread wealth disparities and persistent workplace discrimination, have left many people of color drowning in student debt.
A 2019 report from the Institute on Assets and Social Policy at Brandeis University found that "Twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent — with almost half holding no student debt — whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total."
Two-thirds of respondents to Mustaffa Bishop's survey said, in hindsight, they regretted having taken out student loans.
"The student debt crisis is a racial and economic justice issue and we must finally begin to address it as such," said Rep. Ayanna Pressley, D-Mass., in a statement roughly one year ago. "Broad-based student debt cancellation is precisely the kind of bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expect them to deliver."
There are two ways to cancel student loans
To understand why Biden hasn't pushed for broad student loan forgiveness, it helps to understand how he could, using one of two doors: 1) Congress or 2) executive action.
Door No. 1 is less controversial, to be sure, but keying it open requires bipartisan support or, at least, unwavering support from Democrats. Loan cancellation appears to have neither.
Consider this: Among the proposals that have been dropped from Biden's Build Back Better agenda is his pitch for free community college. It's hard to imagine Democrats would abandon that, at a cost of roughly $45 billion, but still support spending at least $370 billion on student loan forgiveness.
So this door is likely locked — and maybe boarded up from the inside.
That leaves Door No. 2.
Much has been written about the president's authority — through his education secretary — to simply cancel the debts of millions of borrowers. Here's an NPR primer from nearly two years ago.
But Biden doesn't seem eager to try this door. For one thing, he says, it's not certain that canceling student loans with the stroke of his pen would hold up in court, admitting in a February 2021 town hall that "I don't think I have the authority" to cancel $50,000 per borrower.
And Biden is not alone in his skepticism.
"The president can't do it," said House Speaker Nancy Pelosi, D-Calif., speaking to the media in July. "That's not even a discussion."
Whether Pelosi's conclusion was driven by facts or political expediency (read: giving Biden cover for not keeping a campaign promise), Biden has resisted acting unilaterally.
There's also the matter of cost. Again, forgiving $10,000 per borrower would come with about a $370 billion price tag, according to the Brookings Institution. Forgiving $50,000 per borrower could cost about $1 trillion.
"Why should taxpayers — 70% of whom didn't go to college — pay back loans for people who have an obligation they haven't fulfilled?" Foxx asks. (In 2020, the U.S. Census Bureau reported that "From 2010 to 2019, the percentage of people age 25 and older with a bachelor's degree or higher jumped from 29.9% to 36.0%.")
Foxx thinks this popularity question is a big reason behind Biden's hesitancy to act.
"I do think the president maybe understands that broad loan forgiveness is not popular in this country, which is why, I think, he has not gone the route of doing what some in his party want to do."
But polling suggests broad loan forgiveness would be popular, if done with some nuance. For example, a Grinnell College poll conducted in March found that 27% of respondents supported forgiving all student debt and an additional 39% supported forgiveness "for those in need." In other polling — from Vox/Data for Progress and the Harris Poll — a majority of respondents supported broad, if limited, forgiveness.
Instead of acting unilaterally, though, this year Biden asked the Education and Justice departments to explore his legal options. The results are still TBD, more than six months later.
Since then, the White House has gone largely quiet on loan cancellation. Some advocates — and many Democrats — worry that, for whatever reason, the administration is intentionally dragging its feet. Not so, said Kvaal, the education undersecretary, in his interview with NPR.
"Legal authority is not an on-off switch. You need to think about the standards that would be applied, the rationale that we can muster," Kvaal explained. "We are looking very carefully with the White House and the Department of Justice at whether we can cancel loans across the board for everyone, and that's something where deliberations are still continuing."
Time may be running out
There's an argument to be made that Biden is running out of time to broadly cancel student debts. Democrats' majorities in Congress are likely to shrink next year, if not melt into minorities.
What's more, the Education Department has said it will require that federal student loan payments, paused during the pandemic, resume as early as Jan. 31.
Imagine millions of borrowers navigating a repayment system they haven't used in more than a year and a half. Many will need to speak with their loan servicing company to change repayment options. And two of those companies, which serve roughly 15 million borrowers, are right now transitioning out of the federal student loan business all together.
NPR has spoken with more than a dozen student loan experts, including a handful inside the department, who all say they expect this return to repayment to be ... difficult.
If broad-based student loan forgiveness is going to happen, it makes all the sense in the world to do it before Jan. 31. Biden's campaign pledge would mean millions of borrowers would have their debts erased, allowing them to avoid this difficult, potentially disastrous payment restart.
That doesn't mean Biden has to keep his $10,000 loan forgiveness pledge by then. It just means, if he doesn't, it's hard to imagine broad forgiveness happening anytime soon, if at all.
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