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Joe Biden Just CAN'T STOP WON'T STOP Forgiving Student Debt!
Another 125,000 Americans have a lot less to worry about.
The pandemic pause on student loan payments ended October 1, which after three years of relief has a lot of people looking for ways to juggle their loan payments again — or for those who graduated during the pandemic, for the first time. To help, the Biden administration in August rolled out a new income-driven repayment plan that will reduce monthly payments for many borrowers. And on Wednesday, the administration announced that it has forgiven federal student loan debt for another 125,000 Americans, to the tune of $9 billion. This isn’t yet the broader debt relief Biden promised to replace the program the Supreme Court threw out in June. That’s still being developed by the Education Department, with an eye to designing a student debt relief rule that will withstand the objections the Court had to Biden’s first try. (There’s some new news on that this week too; see the end of this post. )
Rather, this latest round of debt forgiveness follows up on debt cancellation programs the Education Department already has in place. The biggest chunk of loan forgiveness, $5.2 billion in new debt relief for 53,000 borrowers, will go to participants in the Public Service Loan Forgiveness (PSLF) program, which Congress created in 2007. PSLF allows borrowers who go into teaching and other public service jobs to have their debts erased after 10 years of regular payments. Unfortunately, that meant that the first borrowers in the PSLF program started qualifying for relief when the Education Department was subject to the tender mercies of Donald Trump’s Education Secretary Betsy DeVos, and for some reason almost no loans were forgiven — in the first year borrowers qualified for forgiveness, just 98 people actually had their loans erased, out of 28,000 applicants.
So yeah, Biden’s Education Department, under Secretary Miguel Cardona, fixed that for good in 2022, and made the corrections permanent in July. I know, I went into a lot of detail above, but I think it’s important to emphasize just how badly the Trump administration cheated borrowers, “losing” their documentation and finding any excuse to deny legitimate applicants. Cardona’s administration went through years of bollixed loan accounts and is now making damn sure that borrowers who met their obligations get the loan relief they’re owed.
And for that matter, previous administrations’ Education Departments weren’t necessarily anything to write home about either, as reflected in the second big tranche of loan forgiveness announced yesterday, $2.8 billion in debt relief for about 51,000 more borrowers who should have had their loan balances erased through income-driven repayment plans because they made payments for 20 years or more, but who for various reasons didn’t get the forgiveness they should have. That’s the big debt-relief program that I and 804,000 of my closest friends benefited from in July, which corrected for literally decades of mismanagement by both private loan servicing companies and by the Education Department under previous administrations.
Both the PSLF fix and the income driven repayment fix are ongoing; see my July article and the Education Department website for more information. If you think your loans qualify, you may need to consolidate your student loans before the end of 2023.
Finally, one more group of borrowers received debt relief this week; $1.2 billion in debt forgiveness for about 22,000 borrowers who have permanent or total disabilities, whose loans qualified for discharge through a data match with the Social Security Administration. As far as I can tell, that group may actually have been a routine approval rather than making up for overdue debt erasure.
In a statement, Secretary Cardona — who’s on my short list for Best Bureaucrat of the Biden Administration, an award I just made up — thanked his bosses for giving his department a mandate to get into the guts of the student loan system and make it run smoothly for once:
“For years, millions of eligible borrowers were unable to access the student debt relief they qualified for, but that's all changed thanks to President Biden and this Administration's relentless efforts to fix the broken student loan system.”
"The Biden-Harris administration's laser-like focus on reducing red tape, addressing past administrative failures, and putting borrowers first have now resulted in a historic $127 billion in debt relief approved for nearly 3.6 million borrowers.”
Goddamn right. It’s been an impressive demonstration that government really can work when the people running an agency know what they’re doing and have a clear sense of who they’re doing it for: the American people, cheesy as that patriotic sentiment may sound these days.
Also too, for all the whining you hear from critics of these loan forgiveness efforts — “You borrowed money and SIGNED A CONTRACT to PAY IT BACK”— there seems to be a blind spot when it comes to the other side of things. Borrowers signed on to repayment programs that contractually required the federal government to forgive loans after borrowers met their 10 or 20-year payment obligations, but hundreds of thousands of them never got that relief. (Or in many cases, like mine, borrowers were never even informed the option existed.) But when Biden’s administration takes action to fix that injustice, the Usual Suspects howl about what a fraud it is, as if actually using the repayment-and-forgiveness mechanism Congress authorized is a cynical bid to buy votes. Grumble.
Finally, the Education Department last week announced progress on the administration’s efforts to provide broader federal student debt relief under the Higher Education Act, in a way that may better withstand Supreme Court fuckery. The department has put together a “negotiating committee” that will hammer out the new rules, and released an “issue paper” outlining key matters for the committee to address, including
questions about borrowers whose balances are greater than what they originally borrowed, whose loans first entered repayment decades ago, who attended programs that did not provide sufficient financial value, who are eligible for relief under programs like income-driven repayment but have not applied, and borrowers who have experienced financial hardship and need support, but for whom the current student loan system does not adequately address.
Buncha damn technocrat problem solvers, thinking that government should make people’s lives better. Why, hardly any of those sound like something Fox News could freak out about — but they’ll find a way.
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