Editorials, Opinion

Biden’s small wins on loan forgiveness

Despite the failure of his broad student loan forgiveness plan in the Supreme Court, President Joe Biden and his administration have found ways to deliver on his campaign promise with smaller, more targeted forgiveness efforts.

In early December, the Biden administration announced another round of forgiveness: $4.8 billion in relief for more than 80,000 borrowers. When taken altogether, the targeted efforts have resulted in $132 billion in loan forgiveness for more than 3.6 million borrowers.

If it feels like this happened under the radar, that’s because it did. The sweeping debt forgiveness Biden tried earlier this year — a blanket absolution of up to $10,000 for almost any borrower — garnered massive headlines as a campaign promise kept. But the high court considered it a misuse of the Higher Education Relief Opportunities for Students Act.

When that effort failed in July, Biden and his administration shifted their approach to work within the existing framework. The latest round of financial pardons comes from “fixes,” in the White House’s words, to income driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF) systems.       

A 2022 investigation by NPR found that the income driven repayment programs were badly mismanaged. Part of IDR is a promise to forgive any remaining loan balance as long as a borrower has been paying on it for 20-25 years. Documents from 2021, obtained by NPR, showed that 4.4 million borrowers had been making payments on their loans for the requisite 20 years, but only 32 had their remaining debt canceled under IDR.

So far, the IDR adjustments have rightfully canceled $44 billion in debt for 900,000 qualifying borrowers.

The other half of the latest loan forgiveness comes through fixes to Public Service Loan Forgiveness (PSLF), which NPR called “a magnet of confusion, mistakes and mismanagement since its inception in 2007.” One of the largest barriers to borrowers under PSLF was that loan servicers and even individual Education Department employees weren’t sure what employers were considered “public services.” This kept thousands of borrowers from receiving the forgiveness for which they qualified. In addition, thousands of people who had taken out Federal Family Education Loans (FFEL) found out after FFEL was shuttered that they would have to consolidate to Federal Direct Loans — but payments made on FFELs didn’t count toward public service forgiveness.        Through the new fixes, about 750,000 eligible borrowers have received $53 billion in relief through PSLF since October 2021.

In West Virginia alone, 4,360 borrowers have had $257.9 million in student debt forgiven through PSLF and another 5,610 borrowers have had $223.8 million forgiven through IDR adjustments.

In many ways, what Biden and his administration have accomplished here is better than his grand plan to cancel student loan debt for virtually everyone. No one should be able to complain about what the Education Department is doing now, because it isn’t offering relief to people who “don’t deserve” it nor is it “giving money away” as some critics might say. Rather, it is fixing past mistakes and ensuring that those who had already earned their student loan forgiveness finally receive it. And that is a win worth celebrating.