President Biden has so far forgiven $180 billion in student loans for 4.9 million borrowers. Much more relief is unlikely now.
Andrew Caballero-Reynolds/AFP via Getty Images
The Biden administration’s ambitious plans to provide debt relief for millions of Americans is officially dead along with a number of other proposed regulatory changes.
The administration said Friday it’s withdrawing two debt relief proposals from consideration. The Education Department had been reviewing thousands of comments on the plans and preparing to finalize at least one proposal before Friday’s announcement. The Associated Press first reported on the decision.
The department is also scraping its proposal to amend Title IX to prohibit blanket bans barring transgender students from participating in the sport consistent with their gender identity. That proposal proved controversial, receiving more than 150,000 comments and prompting legal challenges to the department’s separate overhaul of Title IX. added
“In light of the comments received and those various pending court cases, the department has determined not to regulate on this issue at this time,” officials wrote in a notice on the Federal Register. added
The department also said Friday that it’s abandoning the effort to update the rules for accreditation, state authorization and cash management. Regulatory proposals were hashed out in the spring but have stalled since. Proposals to gather more data about distance education and open up college-prep programs to undocumented students appear to be moving forward. added
The department said terminating the rule-making process or those three areas will “allow for additional evaluation of recent changes in other regulations and industry practices.” added
The debt relief plans have been in the works since summer 2023 after the Supreme Court struck down President Biden’s first attempt at providing student loan forgiveness. Republicans and other critics said these latest debt relief plans, which would have benefited 36 million Americans, were unconstitutional and amounted to an unfair wealth transfer.
Education Department officials maintain that they have the authority to forgive student loans for borrowers who meet certain criteria or are facing financial hardship, but they concluded that they don’t have the time to implement the proposals before Biden leaves office Jan. 20.
“With the time remaining in this administration, the Department is focused on several priorities including court-ordered settlements and helping borrowers manage the final elements of the return to repayment,” officials wrote in a Federal Register notice. “At this time the Department intends to commit its limited operational resources to helping at-risk borrowers return to repayment successfully.”
Withdrawing the rule “will assure agency flexibility in reexamining the issues,” officials added. The move means that the incoming administration would have to start from scratch on a rulemaking process rather than just rewrite the pending proposal.
Some Republican attorneys general sued the administration over one of the plans, which would have provided targeted debt relief to borrowers who owe more than they initially borrowed or have been repaying their loans for more than 20 years, among other groups. That plan was blocked by a federal judge before the department could finalize it.
The department’s decision came on the same day the Biden administration announced another round of loan forgiveness. The Education Department announced Friday morning that it would forgive loans for 55,000 borrowers who reached eligibility through Public Service Loan Forgiveness. A program created in 2007 and retooled under Biden, PSLF relieves an individual’s remaining debt if they properly complete 120 monthly payments while working full-time in a public interest career like law enforcement, health care or education.
Including Friday’s batch of relief, which totaled $4.28 billion, the Biden administration has now forgiven $180 billion in student loans for 4.9 million borrowers.
Borrower advocacy groups like the Student Borrower Protection Center say that while they are deeply disappointed the Biden administration has to withdraw its regulations in response to legal pushback from right-wing attorneys, they appreciate Biden’s efforts and celebrate the regulations he was able to finalize.
“President Biden’s fixes to the Public Service Loan Forgiveness program and other student loan relief programs have once again delivered lasting change and will benefit millions of borrowers for years to come,” said Persis Yu, deputy executive director of the Student Borrower Protection Center, in a statement. But, at the same time, Yu added that “the actions of right-wing attorneys general have blocked tens of millions of borrowers from accessing critical student debt relief.”
Meanwhile, Republican lawmakers, including Senator Dr. Bill Cassidy of Louisiana, described Biden’s unfinalized attempts at student debt relief as a “scheme to transfer student debt onto American taxpayers.”
“The Biden-Harris administration’s student loan schemes were always a lie,” the senator said in a statement. “With today’s latest withdrawal, they are admitting these schemes were nothing more than a dishonest attempt to buy votes by transferring debt onto taxpayers who never went to college or worked to pay off their loans.”
Jessica Blake contributed to this report.