President Joe Biden announced a new round of student loan forgiveness this week, totaling over $160 billion in debt relief over the past three years. This latest discharge is aimed at borrowers who attended schools accused of misconduct and is part of the administration’s multi-pronged approach to implementing student loan forgiveness initiatives. Biden stated that this is not the last step in providing relief to those in need, hinting at more forgiveness to come.
Since the Supreme Court struck down Biden’s mass student loan forgiveness plan last summer, the administration has utilized other tools to cancel student loan debt for at least 4.6 million borrowers. This includes initiatives like the IDR Account Adjustment, Public Service Loan Forgiveness program improvements, the SAVE plan for income-driven repayment, and simplified discharges for borrowers with disabilities. These efforts have resulted in billions of dollars in debt relief for borrowers across the country.
In addition to these existing programs, the Biden administration has approved $28 billion in debt forgiveness for 1.6 million borrowers harmed by their schools, such as through misrepresentations or closure. The latest round of relief was announced for former Art Institute students who were misled about career prospects, earnings, and job placement services. This forgiveness is part of a series of group discharges for students of for-profit colleges that engaged in misconduct like Corinthian Colleges and ITT Technical Institutes.
The administration is finalizing plans for a new student loan forgiveness program, targeting relief towards specific groups who have experienced significant interest accrual, are in repayment over 20 or 25 years, qualify for existing plans but haven’t applied, or attended low-value schools. The regulations for this program are open for public comment until May 17th, and the plan is expected to launch in the fall. There is also a proposed fifth pathway to relief based on hardship, considering factors like age, disability, income, and prior approval for public benefits.
Critics have urged the administration to go further with a hardship-based debt relief initiative and to classify student loan debt as a hardship in itself. However, officials believe a targeted approach is more likely to withstand legal challenges. With a Supreme Court that has been skeptical of loan forgiveness plans, it remains to be seen how broad-based debt cancellation efforts will fare in the long run. Despite the challenges, President Biden is committed to providing relief to borrowers burdened by student loan debt.
