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student debt relief
One Year After Supreme Court Ripped Away Student Debt Relief, Borrowers Still Waiting for Promised Relief
The clock is ticking. Young borrowers must not lose out on urgently-needed debt relief should November bring a new administration.
Jun 30, 2024
Exactly one year ago, President Joe Biden stood before the American people after the politicized U.S. Supreme Court ripped away critical student debt relief from 40 million borrowers. The President reaffirmed his commitment to cancel student debt and pledged to use different authority under the Higher Education Act. Since then, President Biden has worked arduously to deliver debt relief to nearly 5 million student loan borrowers by making critical fixes to loan relief programs. But now, in nearly identically timed releases, federal judges in Kansas and Missouri issued a pair of injunctions blocking portions of the new Saving on a Valuable Education repayment plan (the SAVE plan)—making President Biden’s promise of relief more critical than ever.
Biden’s fixes to Public Service Loan Forgiveness and the Income-Driven Repayment Account Adjustment gave millions of borrowers the relief they should have received all along. And this cancellation has been life-changing for the borrowers who have been trapped in the broken student loan system for decades. But one fix that still remains elusive is the crushing burden that student loan debt is putting on our nation's youngest borrowers.
If this rule is pushed to the next Administration, young borrowers may be cut out of relief entirely.
Young people have not had decades to experience runaway interest or pay into the wrong payment plan, but they are being devastated by the student loan crisis nonetheless. For borrowers who are just starting out in their careers, their student debt is inhibiting their ability to start a family, buy a home, save for retirement, or start a business. Student debt is exacerbating racial and economic inequities and widening the racial wealth gap, worsening economic insecurity for people with disabilities, and increasing health disparities and the mental health crisis. And after this week’s rulings, these young borrowers may not even have the benefit of affordable payments and the guarantee of a light at the end of the tunnel.
A recent poll found that at least two-thirds of the youngest voters consider cancelling student loan debt to be an important issue in the upcoming election. It is no wonder why. In fact, younger voters are also far more likely to connect student debt relief with a stronger U.S. economy no matter their political affiliation—even Gen Z and Millennial Republican voters believe action to cancel student debt will help the economy by a 2:1 margin.
And yet, these are the last borrowers to see relief. Earlier this year, a U.S. Department of Education committee held a series of meetings to create a hardship rule for student debt relief. The committee came to consensus on a proposal to provide the Secretary with broad authority and flexibility to cancel debt for borrowers most likely to face difficulties repaying their student loans. It would allow the Secretary to consider a wide-ranging list of factors when considering whether a borrower is experiencing hardship. If enacted, this rule has the potential to unlock economic mobility for millions of young borrowers, workers, and families.
Despite the fact that the committee reached consensus in February, the Administration has yet to publish the proposed rule on hardship. It is no secret that time is running out for the Administration to finish its regulatory agenda. If this rule is pushed to the next Administration, young borrowers may be cut out of relief entirely.
It has been a year since the Supreme Court callously ripped vital relief from tens of millions. Providing relief to young borrowers must be a priority—the Administration cannot allow young student loan borrowers to be a victim of the clock.
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Sanders Leads Senate Dems in Push to Strengthen Student Loan Debt Relief
"We must act boldly so that the millions of Americans who are struggling to pay for basic necessities are not crushed by mountains of debt for getting a college education," said the Vermont senator.
May 21, 2024
Applauding the Biden administration for its proposal of "historic" methods of canceling student debt for millions of Americans after President Joe Biden's original plan was struck down by the U.S. Supreme Court last year, Sen. Bernie Sanders on Tuesday led members of the Democratic caucus in submitting a public comment with suggestions for strengthening the new proposal.
"We support the department's efforts to provide significant pathways to relief for student loan borrowers. These efforts are critical, especially in the wake of the Supreme Court's extreme, overreaching decision to strike down the Biden administration's original student debt relief plan," wrote the senators, including Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.), and Cory Booker (D-N.J.).
The administration's plan—which would entirely wipe out the student loan debt held by 4 million people, provide at least $5,000 in debt relief to 10 million borrowers, and eliminate the interest of 23 million more—the letter states, "would undoubtedly eliminate the crushing student debt burden for borrowers who have long been waiting for needed relief."
But with 43 million people in the U.S. owing a collective $1.6 trillion in federal student loans—an amount that has prevented many from purchasing homes, starting businesses, and having families—the senators said the government must "act boldly so that the tens of millions of Americans who are struggling to pay the rent, put food on the table, and pay for the basic necessities of life are not crushed by a mountain of debt for getting a college education."
The lawmakers proposed:
- Eliminating all of the excess interest that has accrued over what a person originally borrowed, regardless of the repayment plan they are on or what their income is;
- Discharging debt for borrowers who have been in repayment for over two decades on a rolling basis, so no borrower has to delay or forego retirement because of their student loan debt;
- Providing relief to borrowers who have been victims of servicing errors or misconduct; and
- Providing debt relief to every eligible borrower automatically.
Eliminating excess interest would "help millions of borrowers get off the never-ending treadmill of student loan repayment and help them make progress toward eliminating their debt," said the senators. "Student loan debt should never be a life sentence."
Sanders (I-Vt.) and his colleagues also recommended full debt cancellation for borrowers who have repaid enough debt to cover their original principal, regardless of their income.
The lawmakers urged the Department of Education to promptly release its proposed final rule for debt relief for people experiencing economic hardship, which could "provide needed relief to borrowers not otherwise captured in this proposal."
"Every day spent without relief is another day borrowers experiencing economic hardship face unnecessary financial burdens," reads the letter.
The Biden administration has said it plans to finalize its student debt proposal by this coming fall, when Americans will vote in the general election. Former President Donald Trump, the presumptive Republican nominee, has opposed student debt cancellation.
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'A Big Deal': Progressives Applaud New Biden Plan to Provide Student Debt Relief for Millions
"Progressives have led the fight for student debt cancellation, and Joe Biden has responded," said one advocate.
Apr 08, 2024
Organizers who have tirelessly pushed for student debt cancellation applauded on Monday as President Joe Biden—who years ago dismissed the proposal as "unrealistic"—announced a plan to help tens of millions of Americans burdened with educational debt.
Biden announced his new plan at Madison Area Technical College in Madison, Wisconsin, less than a year after the U.S. Supreme Court struck down his previous program, which would have provided relief to 40 million borrowers by canceling up to $20,000 in debt per person.
Aissa Canchola Bañez, policy director of the Student Borrower Protection Center (SBPC) credited Biden with publicly resolving to find a solution for struggling Americans "only hours after the Supreme Court callously struck down his original debt relief program."
The president's new plan would wipe out the entire debt amount held by about 4 million people, give debt relief of at least $5,000 to 10 million borrowers, and reduce the undergraduate and graduate student debt of 23 million people whose interest would be eliminated.
The plan would allow millions of young people to "finally get on with their lives instead of their lives being put on hold," said the president.
Student debt is "not just a drag on them, it's a drag on our local economies," Biden said in Madison. "When you can't afford to buy a home, start that small business, chase that career that you'd been dreaming about for a long time."
I said I wouldn't back down from using every tool at our disposal to get student loan borrowers the relief they need.
That's why today we're announcing new plans that, if implemented, would cancel student debt for millions more. pic.twitter.com/rNiCxzzlU3
— President Biden (@POTUS) April 8, 2024
Bañez said in addition to bringing "tens of millions of borrowers one step closer to realizing the life-changing impact of student debt cancellation," Biden's announcement "also offers a roadmap for how this administration should deal with a hostile Supreme Court majority captured by right-wing special interests."
"Call the high court's bluff by aggressively using the full power of the law and delivering for working people," she said. "For too long, student debt has blocked homeownership, inhibited savings, limited career opportunities and economic mobility, and choked at the promise of entire generations. Taken together, the Biden administration's actions are setting a path to a debt-free, brighter economic future for more than 30 million Americans."
"Now, the president must move fast and finish the job," she added.
Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, said pressure from "borrowers, activists, and progressives in Congress" pushed Biden to develop a new plan after his original program was struck down.
"Progressives were the earliest and loudest champions of student debt cancellation, and this president is delivering—despite Republican obstruction," she said. "We are proud to continue our partnership with the Biden administration on its implementation of this and other pathways to cancellation."
The Biden administration said it expected Republicans to file legal challenges, which could prevent the new provisions from going into effect by the time Americans choose between Biden and former President Donald Trump in November.
"President Biden will use every tool available to cancel student loan debt for as many borrowers as possible no matter how many Republican officials stand in his way," Karine Jean Pierre, the White House press secretary, told The New York Times.
"At a time when young people across the country are struggling economically, President Biden's decision to reduce the outrageous level of student debt they face will be extremely helpful."
Americans who now owe more in student debt than the amount that they originally borrowed due to interest would have up to $20,000 in interest wiped out. People who make less than $120,000 per year could have all of their interest canceled.
People who took out federal loans for undergraduate degrees and began repaying them more than 20 years ago would have their debt automatically canceled. The same would apply for people who began repaying their graduate degree loans more than 25 years ago.
People who attended colleges that have since lost their certification or their eligibility to participate in federal student aid would have their debt wiped out, and Americans who are particularly burdened with other necessary expenses could apply to have their debt canceled.
The program "will change lives," said U.S. Rep. Cori Bush (D-Mo.) as she pledged to continue her push to "cancel student debt fully."
Andrew O'Neill, legislative director for progressive advocacy group Indivisible, noted that combined with the $146 billion in relief Biden has already provided to about 4 million borrowers through executive actions and other measures, "more than 30 million folks will now get relief from Biden's programs."
"Progressives have led the fight for student debt cancellation, and Joe Biden has responded," O'Neill told the Times.
Sen. Bernie Sanders (I-Vt.), a longtime advocate of student debt cancellation and tuition-free college, applauded Biden for "using every possible tool to reduce student debt."
Astra Taylor, a filmmaker and leading student debt cancellation activist, noted that Biden's plan falls short of complete debt relief, but said the power of economic justice campaigners' advocacy is undeniable, considering the president's decision to prioritize student debt.
"A reminder that a U.S. president leaning into debt cancellation like this was unimaginable not that many years ago," said Taylor. "Do we need to keep pushing so actions match words? Yes. Do we need to keep fighting to win not only debt relief but free college? Of course."
"Organizing," she added, "is everything."
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