Yes, Student Loan Cancellation Is Still On The Table — Key Details - Forbes

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President Biden has not enacted broad student loan forgiveness. But that doesn’t mean the idea is dead.

Biden excluded student debt cancellation from his budget blueprint and from his massive “human infrastructure” proposal released earlier this spring. This led to speculation that the President may have soured on the idea entirely.

But that is not necessarily the case. Advocates have been pushing Biden to enact mass student loan cancellation through executive action. His decision to exclude student loan forgiveness from his budget proposal and infrastructure plan — both of which would need to be approved by Congress — may simply reflect the reality that student debt relief is unlikely to pass both the House and the Senate, where Democrats have only small majorities and are focused on more immediately pressing matters.

Here’s where things stand with student debt cancellation.

Will Biden Use Executive Action To Cancel Student Debt?

Biden has consistently expressed support for broad student loan forgiveness, but has favored a more “targeted” approach, coming out in favor of $10,000 in across-the-board debt cancellation and arguing that existing student loan forgiveness programs should be improved and expanded. He has not been particularly supportive of more generous proposals of $50,000 or more in student debt cancellation, as suggested by advocacy groups and leading Democrats in Congress. Biden has also expressed concerns that broad student loan forgiveness could skew benefits towards higher-income earners or Ivy League graduates — concerns that advocates say are groundless.

But while Biden has nevertheless indicated that he supports some iteration of student loan forgiveness, he has been skeptical about using executive action to achieve it. Congressional Democrats and student loan legal experts have argued that the Higher Education Act provides the president with broad authority to “compromise, waive, or release” a borrower’s student loan liability. Advocates have also pointed to the HEROES Act — which both former President Trump and President Biden relied on to suspend billions of dollars in student loan interest after the original CARES Act moratorium expired — similarly provides authority to “waive or modify” federal student aid programs during a national emergency. Other higher education legal experts have disagreed with these conclusions, however, arguing that mass cancellation of student loans was never Congress’s intent when enacting these statutes.

In April, Biden directed his administration to conduct a formal review of legal authorities that could be the basis for enacting mass student loan forgiveness through executive action. It has now been over three months since that review was initiated, but the are no signs yet that it has formally ended, or that any firm conclusions have been drawn.

Biden Uses Executive Action To Enact Targeted Student Loan Forgiveness

In the meantime, the Biden administration has been following through with its stated approach of using executive action to enact more targeted student debt cancellation. These actions have included the following:

The Biden administration reversed a Trump-era policy that allowed for partial student loan cancellation for borrowers granted relief under the Borrower Defense to Repayment program, which cancels federal student loan debt for borrowers defrauded by their schools. The change would allow around 72,000 borrowers who were eligible for Borrower Defense relief, but received only partial cancellation, to get their full student loan balances cancelled. The total relief will be around $1 billion.
Biden reversed the loan reinstatement of around 41,000 disabled borrowers who had received a student loan discharge based on their disability. These borrowers had their discharges reversed because they failed to submit required paperwork during a post-discharge monitoring period. Biden’s actions will return the reinstated loans to a discharged status, and he waived subsequent monitoring requirements for the remainder of the pandemic.
Biden’s stimulus package that Congress passed in March included funding for colleges and universities. The administration updated policy guidance shortly thereafter that allowed schools to use these funds to cancel institutional student loan debt for students impacted by the pandemic. Since then, a growing number of colleges have cancelled millions of dollars in student loan debt for thousands of students.
Last month, the Biden administration announced that 18,000 former students of the now-defunct ITT Technical Institutes would receive $500 million in student loan cancellation through the Borrower Defense program.

While these actions have allowed tens of thousands of student loan borrowers to get their debts cancelled, the total amount of student loan forgiveness amounts to a tiny of fraction of the country’s outstanding student loan debt. Advocate are pushing the Biden administration to go much further.

What’s Next?

The debate over widespread student loan forgiveness is not ending, and the issue remains very much alive. Here are some things to keep an eye on during the next several months:

The results of the Biden administration’s student loan forgiveness legal review could be announced at any point.
The current moratorium on federal student loan payments and interest is set to expire on September 30. There is a growing push to extend this deadline, potentially into 2022, to give borrowers more of a reprieve, and to give the administration more time to enact broader reforms.
Advocacy groups have been pushing the Biden administration to broaden relief under the Borrower Defense program (tens of thousands of applications remain unprocessed), to automatically cancel the student loan debt for 500,000 disabled borrowers who qualify for automatic relief, and to waive the complex requirements of the Public Service Loan Forgiveness (PSLF) program so more borrowers can obtain immediate debt cancellation.
The Biden administration has started to conduct public hearings as part of a lengthy process to review and potentially overhaul major federal student loan programs such as Borrower Defense, the Total and Permanent Disability (TPD) discharge program, income-based repayment, and Public Service Loan Forgiveness.