With a looming deadline for student loan repayments, borrowers are holding out hope that their debt may continue in forbearance—or be forgiven altogether. In the past 10 months, President Joe Biden has wiped out more than $11 billion in student debt, but that amount only accounts for less than 1% of all federal loans; there’s currently more than $1.7 trillion in outstanding debt. And with about 43 million federal student loan borrowers, only a few hundred thousand have received the help they need so far.
Mass student debt cancellation conversations ‘continuing,’ education secretary saysBY Sydney LakeOctober 27, 2021, 8:38 PM
Education Secretary Miguel Cardona, however, indicates that there’s still talk of additional debt cancellation among those in the Biden administration. “Conversations are continuing” about broad student loan forgiveness, Cardona said during the Atlantic’s Education Summit on Tuesday.
“We recognize that student debt is holding so many people down,” Cardona said. “We’re focused, and it’s a priority for me—and for President Biden—to make sure that part of the conversation is examining loan forgiveness.”
Cardona didn’t provide any specifics on what further loan forgiveness would look like or which borrowers it might benefit. Instead, he highlighted measures that the Biden administration has already taken to knock out some student debt.
Student loan forgiveness so far
In early October, Biden announced an overhaul to the Public Service Loan Forgiveness (PSLF) program—an initiative aimed at providing debt cancellation for public servants. Since its 2007 inception, 98% of borrowers who applied for forgiveness were denied by the program, which Cardona called “unacceptable” on Tuesday. The overhauls to the PSLF program will culminate in about $1.74 billion in student loan forgiveness.
Through three rounds of forgiveness, the Biden administration has canceled about $2.6 billion for borrowers who attended institutions that took part in deceptive or illegal practices; this will ultimately help about 188,000 federal student loan borrowers.
As Cardona noted, “Unfortunately, there are many who are in major debt that weren’t even able to finish their degree and do not have the means to remove those debts.”
Borrowers with disabilities have also received long-awaited student loan forgiveness. More than 323,000 borrowers who have proved they have a “total and permanent disability” will have their debts automatically canceled.
What’s next for debt forgiveness efforts
Top Democrats and student loan forgiveness proponents continue to push the Biden administration for broad cancellation to the tune of $50,000 per borrower. Biden, however, has publicly stated he’s only “prepared to write off $10,000” in debt. That’s because he doesn’t believe he has the authority to cancel student debt en masse through an executive order.
We’ve been waiting for a memo since March from the Education Department regarding the executive branch’s legal authority to enact mass debt cancellation—an action that White House Chief of Staff Ron Klain said at the time would take only a few weeks. It’s now been more than six months, and no such memo has been issued, even though House Democrats pushed for it to be released on Oct. 22.
Despite the unknown status of the mysterious memo, Cardona indicates that mass debt cancellation is still on the table.
“We’re going to be looking at all broad measures, including broad loan forgiveness and what our options are,” he said Tuesday. “But we’re not stopping there. We’re going to improve the systems that we have in our control to provide debt relief, and we’re going to make sure we keep the borrower at the center of the conversation.”