Student-loan forgiveness continues to hang in the balance at a time when many borrowers still feel vulnerable. On July 6, however, the U.S. Department of Education announced an appointment that has the potential to tip the scales in favor of more student-debt cancellation.
President Joe Biden’s administration appointed Toby Merrill—the founder and former director of the Project on Predatory Student Lending—as a deputy general counsel in the department’s Office of the General Counsel. Founded at Harvard Law School’s Legal Services Center, the Project on Predatory Student Lending represents and enforces the rights of low-income student-loan borrowers. During her career, Merrill has fought for student-debt cancellation and against fraud on the part of for-profit schools—what she refers to as the “worst-of-the-worst student debt.”
“The project’s work has truly changed the landscape for student borrowers, and we wouldn’t be where we are today without Toby’s vision and leadership,” Eileen Connor, the newly appointed director of the Project on Predatory Student Lending, said in a statement. “We have a lot of work to do, and we won’t stop until it’s done.”
In March 2021, the Education Department announced it had forgiven the debt of 72,000 borrowers who attended a school that closed suddenly or was proved to have taken part in illegal or deceptive practices. While that may sound like a lot, more than 44.7 million Americans still have federal student-loan debt, totaling a record of $1.57 trillion-plus.
Merrill is also an ally of Sen. Elizabeth Warren, a Democrat from Massachusetts, who has been vocal about student-loan cancellation. During her 2020 presidential campaign, Warren proposed directing the secretary of education to cancel $50,000 of each borrower’s student debt, citing a letter coauthored by Merrill.
The letter from the Legal Services Center of Harvard Law School (coauthored by Merrill, Eileen Connor, and Deanne Loonin) argued that Congress granted the Secretary of Education authority to cancel or modify federal student loans. The question of the federal government’s authority to do so has, in turn, stalled executive action being taken.
“The power to create debt is generally understood to include the power to cancel it,” the letter to Warren says.
Student Debt Crisis, a nonprofit organization focused on ending student debt, sees this appointment as promising, tweeting “This is huge!” in response to the announcement. But President Biden was recently called out by Senate Democrats and debt-cancellation proponents for leaving student-loan cancellation out of his latest budget proposal after saying he supported paying off $10,000 per borrower—so it could still be too soon to tell what this means for the future of student loans.
Continued fight for change
Other lawmakers are fighting for change at the Education Department. On July 1, 23 Senate Democrats sent a letter to Education Secretary Miguel Cardona pushing for relief to student-debt borrowers.
“We encourage the department to pursue policies that reduce disparities in the burden of student debt, simplify loan repayment, close doughnut holes in forgiveness programs, and improve the overall confidence of borrowers in the federal student-loan system,” the letter says.
What also remains in question is whether the freeze put on student loans as a reaction to the shock of the pandemic will get extended yet again.
The freeze started in March 2020 when the U.S. Department of Education, under the CARES Act, issued a temporary suspension of loan payments and a 0% interest rate. It’s set to end on Sept. 30.
