Over 5 million Americans have seen their student loans canceled under Biden’s administration, even after his broader forgiveness plan was blocked.
Washington: So, here’s the scoop. Even though President Biden’s big plan for student loan forgiveness hit a wall, he’s still managed to cancel loans for over 5 million folks. That’s a record for any U.S. president!
Just recently, the Education Department wiped out loans for 150,000 borrowers. This was through programs that were already in place before Biden took office. His team really pushed to make the most of these programs, especially after the Supreme Court shot down his new forgiveness plan.
Biden said, “My Administration has taken historic action to reduce the burden of student debt.” And they’ve really done it, with a whopping $183.6 billion in loans canceled.
But things might change when Trump steps in. He hasn’t laid out his plans yet, but he’s called loan cancellation “vile” before. Republicans have been pretty vocal against Biden’s moves, arguing that taxpayers are the ones footing the bill for those who didn’t go to college or already paid off their loans.
The latest relief mostly comes from a program called borrower defense. This helps students get their loans canceled if they were misled by their colleges. It’s been around since 1994 but didn’t see much action until the Obama years when for-profit colleges were in the spotlight.
Some of the relief also came from programs for borrowers with disabilities and the Public Service Loan Forgiveness program, which wipes out debt for those in government or nonprofit jobs after 10 years of payments.
Most of the recent cancellations were for students from defunct colleges that misled them about job prospects and loan terms. Before Biden, many borrowers struggled to get relief because the rules were so complicated. His administration made it easier to qualify without needing Congress to step in.
For instance, only 7,000 borrowers got their loans canceled through Public Service Loan Forgiveness before Biden took over. Confusion and mistakes by loan servicers led to a 99% rejection rate for applicants.
Many borrowers made payments for years only to find out they were in the wrong repayment plan. Some were even put into forbearance incorrectly, which didn’t count toward the 10 years needed for cancellation.
During the pandemic, the Biden team relaxed the rules, and now over a million public servants have had their loans wiped clean.
All these changes were supposed to support Biden’s main plan for student debt relief, which aimed to give up to $20,000 to over 40 million Americans. But after the Supreme Court blocked that, the focus shifted to maximizing relief through existing programs.
As new cancellation announcements became common, Republicans in Congress accused Biden of overstepping. They’ve fought against his attempts at mass forgiveness, but smaller relief batches kept coming without major legal pushback.
With Republicans now in control of Congress and the White House, they might try to roll back Biden’s changes. It’s still unclear how far they’ll go to tighten the rules on cancellations.
Trump had previously suggested eliminating the Public Service Loan Forgiveness program, but Congress shot that down. Now, a plan for his second term suggests narrowing borrower defense and making repayment plans less generous.
Republicans are hinting that reversing Biden’s changes will be a top priority. Recently, Rep. Virginia Foxx criticized Biden’s expansion of borrower defense, claiming he stretched the law to keep his promises.
When Trump takes office, Foxx warned, “the jig will finally be up.”
