In lead-up to election, Joe Biden pushes to forgive student loans

With over 43 million Americans having student loan debt, and a presidential election on the horizon, President Joe Biden announced on Jan. 31 that his administration will attempt to deliver some degree of debt forgiveness to borrowers.

Student debt forgiveness was one of Biden’s original campaign promises, which led to many young voters turning out to vote for him. In his time in office, Biden was unable to fulfill that promise; his plan to cancel student debt which would’ve benefited nearly 40 million Americans was struck down by the majority conservative Supreme Court in June of last year. Biden criticized the court’s decision and said that his administration would look for another way to relieve student debt.

Biden’s further attempts at canceling student debts, known as Plan B, are much narrower in scope, looking to forgive the debt of around 4-10 million people. 

Plan B targets more specific groups, outlined by a paper issued by the U.S. Department of Education. They include those whose debts are now greater than what they originally borrowed, who started repaying their undergraduate loans 20-25 years ago, who attended schools of questionable quality, who are already eligible for existing relief programs, or are in financial hardship.

While Biden’s original plan was to use an executive order to cancel student debts, he now has to turn to the rulemaking process, which CNBC describes as “lengthier, typically involving a public comment period and other time-consuming steps.” Relief could take as long as mid-2025 to come into effect, but the Department of Education may attempt to try to implement them sooner.

In the meantime, Biden has made improvements to pre-existing debt forgiveness programs over the course of his presidency, resulting in 3.7 million Americans having their loans canceled, though still a far cry from the 40 million that was promised.

Rulemaking sessions for Biden’s Plan B will be held later this month on Feb. 22 and Feb. 23 to discuss how further debt relief could be delivered, with one estimate stating that the plan could forgive student debts for up to 10 million people.

The current frontrunner for the Republican Party, former President Donald Trump, sided with the Supreme Court’s decision to strike down Biden’s original plan, stating that it “would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair.” The statement comes despite the fact that since 2010, Trump has had $287 million in loans forgiven, and as of 2020 owed over $1 billion.

The other Republican candidates also opposed student loan forgiveness, with Nikki Haley tweeting that “The Supreme court was right to throw out Joe Biden’s power grab.”

According to the Education Data Initiative, Americans owe $1.75 trillion in federal and private student loan debts, with 15% of American adults stating they have outstanding undergraduate student debt. While the average amount of debt for students and cost of tuition have been rising, the average wage has been in decline, and as debts remain unpaid, they continue to accumulate interest.

The cost of attending college has increased by 6.8% each year, 196.2% faster than the annual inflation rate. The average cost for a college student per year is $36,436, but the Education Data Initiative, factoring in student loan interest and loss of income, found that a bachelor’s degree could end up costing over $500,000. Having to stay in school for longer, such as if you decide to change your major later on, adds even more to the total cost. On average, borrowers will spend the next 20 years after college paying off their loans.

The youth voter turnout in 2020 was key to Biden’s victory, but the president may lose that support in the upcoming election, in part due to being unable to implement the promise of universal student loan forgiveness, and due to the U.S.’s continued support of Israel in their attacks on Palestine.

Biden’s student loan forgiveness through the rulemaking process may come sooner than 2025, especially if his administration believes that expediting may lead to a similar turnout of young people for him in the 2024 presidential election.