Millions have had student loans canceled under Biden – despite the collapse of his forgiveness plan

WASHINGTON (AP) — Despite failing to deliver his promise for broad student loan forgiveness, President Joe Biden has now overseen the cancellation of student loans for more than 5 million Americans — more than any other president in U.S. history. In a last-minute action on Monday (Jan. 13, 2025), the Education Department canceled loans for 150,000 borrowers through programs that existed before Biden took office. His administration expanded those programs and used them to their fullest extent, pressing on with cancellation even after the Supreme Court rejected Biden’s plan for a new forgiveness policy. But the wave of cancellation could dry up when President-elect Donald Trump takes office.

WASHINGTON (AP) — Despite failing to deliver his promise for broad student loan forgiveness, President Joe Biden has now overseen the cancellation of student loans for more than 5 million Americans — more than any other president in U.S. history.

In a last-minute action on Monday (Jan. 13, 2025), the Education Department canceled loans for 150,000 borrowers through programs that existed before Biden took office. His administration expanded those programs and used them to their fullest extent, pressing on with cancellation even after the Supreme Court rejected Biden’s plan for a new forgiveness policy.

“My Administration has taken historic action to reduce the burden of student debt, hold bad actors accountable, and fight on behalf of students across the country,” Biden said in a written statement.

In total, the administration says it has waived $183.6 billion in student loans.

The wave of cancellation could dry up when President-elect Donald Trump takes office. Trump hasn’t detailed his student loan policies but previously called cancellation “vile” and illegal. Republicans have fought relentlessly against Biden’s plans, saying cancellation is ultimately shouldered by taxpayers who never attended college or already repaid their loans.

Biden loosened rules for debt forgiveness

The latest round of relief mostly comes through a program known as borrower defense, which allows students to get their loans canceled if they’re cheated or misled by their colleges. It was created in 1994 but rarely used until a wave of high-profile for-profit college scandals during the Obama administration.

A smaller share of the relief came through a program for borrowers with disabilities and through Public Service Loan Forgiveness, which was created in 2007 and offers to erase all remaining debt for borrowers in a government or nonprofit job who make 10 years of monthly payments.

Most of Monday’s borrower defense cancellations were for students who attended several defunct colleges owned by Center for Excellence in Higher Education, including CollegeAmerica, Stevens-Henager College, and Independence University. They are based on past findings that the schools lied to prospective students about their employment prospects and the terms of private loans.

Before Biden took office, those programs were criticized by advocates who said complex rules made it difficult for borrowers to get relief. The Biden administration loosened some of the rules using its regulatory power, a maneuver that expanded eligibility without going through Congress.

As an example, just 7,000 borrowers had gotten their loans canceled through Public Service Loan Forgiveness before the Biden administration took office. Widespread confusion about eligibility, along with errors by loan servicers, resulted in a 99% rejection rate for applicants.

Huge numbers of borrowers made years of payments only to find out they were in an ineligible repayment plan. Some were improperly put into forbearance — a pause on payments — by their loan servicers. Those periods didn’t end up counting toward the 10 years of payments needed for cancellation.

The Biden administration temporarily relaxed the eligibility rules during the pandemic and then made it more permanent in 2023. As a result, more than 1 million public servants have now had their balances zeroed out through the program.

All those rule changes were meant to be a companion to Biden’s marquee policy for student debt, which proposed up to $20,000 in relief for more than 40 million Americans. But after the Supreme Court blocked the move, the Biden administration shifted its focus to maximizing relief through existing mechanisms.

Republicans have called for a different approach

Announcements of new cancellation became routine, even as conservatives in Congress accused Biden of overstepping his power. Republican states fought off Biden’s later attempts at mass forgiveness, but the smaller batches of relief continued without any major legal challenge.

As Republicans take hold of both chambers of Congress and the White House, Biden’s changes could be targeted for a rollback. But it’s unclear how far the next administration will go to tighten the cancellation spigot.

Trump proposed eliminating PSLF during his first term in office, but Congress rejected the idea. Project 2025, a blueprint created by the Heritage Foundation for a second Trump term, proposes ending PSLF, and narrowing borrower defense and making repayment plans less generous than existing ones.

Republicans have suggested that reversing Biden’s changes will be a priority. Earlier this month, Rep. Virginia Foxx, R-N.C., issued a report blasting Biden’s expansion of borrower defense, saying he “tried to stretch every possible law” to fulfill his campaign promises.

When Trump takes office, Foxx wrote, “the jig will finally be up.”

WASHINGTON (AP) — A new poll shows relatively few Americans say they’re fans of President Joe Biden’s work on the issue of student loans. The survey from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research finds three in 10 U.S. adults say they approve of how Biden has handled the issue of student loan debt, while 4 in 10 disapprove and the others are neutral or don’t know enough to say. The outlook isn’t much better for the Democratic president among those with student loans. The poll reveals a deep divide over the issue of student debt relief even as Biden makes it a campaign priority.

WASHINGTON (AP) — As he campaigns for reelection, President Joe Biden frequently touts his work on student debt, pointing to the millions of people who received cancellation under his watch. Yet relatively few Americans say they’re fans of his work on the issue, even among those who have student loans.

Three in 10 U.S. adults say they approve of how Biden has handled the issue of student loan debt, while 4 in 10 disapprove, according to a new poll from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research. The others are neutral or don’t know enough to say.

The outlook wasn’t much better for the Democratic president among those responsible for unpaid student loan debt, either for themselves or for a family member.

The poll reveals a deep divide over the issue of student debt relief even as Biden makes it a campaign priority. The president is pressing ahead with a new cancellation plan while he strives to energize young adults and Black and Hispanic Americans — groups that are more likely to prioritize student loan relief but have flagging approval for the president.

After Biden’s first attempt at widespread student loan cancellation was struck down by the Supreme Court last year, he proposed a more targeted plan offering relief to certain categories of borrowers. The Biden administration has separately erased student debt for about 4 million people through existing programs.

Asher Marshall was rooting for Biden’s first cancellation plan. It would have chipped away at his $52,000 in student loans. But in hindsight, Marshall says it’s clear Biden made a promise he couldn’t deliver without going through Congress.

“He suggested something that sounded good to a lot of individuals in this country, but there was no way for it to move forward from the onset,” said Marshall, 33, of Jacksonville, Illinois.

Marshall, an independent, still plans to vote for Biden as the “lesser of two evils,” but he questions whether cancellation will energize other Black voters, especially since Biden’s latest plan helps fewer borrowers than the first one.

Melissa Mata feels let down by the president. The Houston resident has $14,000 in student loans from a program she never finished, and she could have used the help that Biden promised.

Now she plans to sit out the November election or vote independent.

“They make these promises to get votes, but they don’t deliver. So I think for me, I wouldn’t trust it,” said Mata, 34, a bookkeeper.

Some others say Biden isn’t to blame.

Samantha Kempf, a social worker in Howell, Michigan, has $78,000 in federal student loans from her bachelor’s and master’s degrees. Kempf, a Democrat, was upset when Biden’s initial plan failed, but she doesn’t hold it against him.

“It was the Supreme Court that shut him down,” said Kempf, 32. “I don’t blame him for it, because he at least made an attempt to get something approved.”

Americans overall had a dimmer view on the Supreme Court’s handling of the issue, the poll found: 15% approve of its work on the issue and around one-quarter disapprove.

About 4 in 10 adults think it is extremely or very important for the federal government to provide student debt relief. A similar share say it’s not too important or not important at all, with about one-quarter in the middle, saying they believe it’s somewhat important.

Younger adults are more likely to prioritize government action on student debt, with about half under 45 saying it’s extremely or very important, compared to 3 in 10 older adults who said the same.

Political divisions are even wider, with 15% of Republicans saying it’s extremely or very important, compared to 58% of Democrats. The issue has become a rallying point for Republicans, who often say taxpayers shouldn’t get burdened with repaying other people’s college debt.

Neil Wolf, 49, repaid his student loans for two associate degrees, including a $23,000 loan he repaid in the 1990s. No one forces students to take out loans, and taxpayers shouldn’t be on the hook to repay them, said Wolf, a Republican.

“We give too much away. You give everything away, nobody appreciates what they have,” said Wolf, of Denton, North Carolina. “Why should I pay for somebody else’s loans?”

Steve Lesyk, a Republican in Gap, Pennsylvania, said he could support cancellation in some cases. It makes sense for people who have racked up big sums of interest or have been paying off loans for decades, he said — two categories targeted in Biden’s new plan.

But in general, he opposes cancellation, saying it doesn’t do anything to prevent students from getting buried in debt in the first place.

“They’re asking people who’ve never had loans to pay back their loans,” said Lesyk, 58, who never had student loans. “This money doesn’t just appear out of the sky, it comes from somewhere, and there’s so many other things that people need right now.”

Biden’s new plan would erase some or all debt for several groups: those with so much accrued interest that they owe more than they originally borrowed, those who have been repaying undergraduate loans for at least 20 years, borrowers who went to low-value college programs that leave graduates with large sums of debt compared to their earnings and those who face other kinds of financial hardship.

None of those categories have support from a majority of Americans, the poll found. Just under half support relief for those who have made on-time payments for 20 years, and 44% support it for people who now owe more on their loan than they originally borrowed. About 4 in 10 support it for those who went to an institution that left borrowers with large amounts of debt compared to their incomes or those facing other forms of financial hardship.

For each category, majorities of Democrats approved forgiveness.

Support was also higher among those who are now repaying student debt compared to those who already paid it off. Almost 7 in 10 current borrowers support relief for people who have older loans, compared to half of Americans who previously paid student loans.

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The poll of 1,309 adults was conducted May 16-21, 2024, using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for all respondents is plus or minus 3.7 percentage points.

WASHINGTON (AP) — The Biden administration is canceling student loans for another 206,000 borrowers as part of a new repayment plan that offers a faster route to forgiveness. The Education Department announced the latest round of cancellations on Friday (April 12, 2024). More people are becoming eligible for student loan cancellation as they hit 10 years of payments, a new finish line for some loans that’s a decade sooner than what borrowers faced in the past. Casting a shadow over the cancellations are two new lawsuits challenging whether the Biden administration has authority to speed up cancellation. Two groups of Republican-led states filed federal suits this month arguing that only Congress has that power.

WASHINGTON (AP) — The Biden administration is canceling student loans for another 206,000 borrowers as part of a new repayment plan that offers a faster route to forgiveness.

The Education Department announced the latest round of cancellations Friday (April 12, 2024) in an update on the progress of its SAVE Plan. More people are becoming eligible for student loan cancellation as they hit 10 years of payments, a new finish line for some loans that’s a decade sooner than what borrowers faced in the past.

Casting a shadow over the cancellations, however, are two new lawsuits challenging the plan’s legality. Two groups of Republican-led states, fronted by Kansas and Missouri, recently filed federal suits arguing that the Biden administration overstepped its authority in creating the repayment option.

“From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” President Joe Biden said in a statement. “I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us.”

With the latest action, the Education Department has now approved cancellation for about 360,000 borrowers through the new repayment plan, totaling $4.8 billion.

The SAVE Plan is an updated version of a federal repayment plan that has been offered for decades, but with more generous terms.

Congress created the first income-driven repayment option in the 1990s for people struggling to afford payments on standard plans. It capped monthly payments to a percentage of their incomes and canceled any unpaid debt after 25 years. Similar plans were added later, offering cancellation in as little as 20 years.

Arguing that today’s borrowers need even more help, the Biden administration merged most of those plans into a single repayment option with more lenient terms.

The SAVE (Saving on a Valuable Education) Plan allows more borrowers to pay nothing until their income rise above certain limits. It also lowers payments more than past plans, eliminates interest growth and cancels unpaid debt in as little as 10 years.

Biden announced the plan in 2022 alongside his broader proposal for a one-time cancellation of up to $20,000 for more than 40 million people. While the one-time cancellation was struck down by the Supreme Court, the SAVE Plan moved forward and initially escaped legal scrutiny.

The repayment plan opened for enrollment last fall, with certain provisions scheduled to be phased in later this year. The faster path to cancellation was among those slated to start this summer, but the Biden administration fast-tracked that benefit early this year, announcing forgiveness for 153,000 borrowers who had hit 10 years of payments.

Almost 8 million Americans have enrolled in the plan, including 4.5 million who pay nothing because they have lower incomes.

In a call with reporters, Education Secretary Miguel Cardona said the plan provides relief and prevents borrowers from falling behind on their loans.

“Now they have some money back in their pockets, instead of a bill that too often competed with basic needs like groceries and health care,” he said.

Under the plan, borrowers who originally borrowed $12,000 or less are eligible for forgiveness after 10 years. Those who took out more than $12,000 can get cancellation but on a longer timeline. For each $1,000 borrowed beyond $12,000, it adds an additional year of payments on top of 10 years.

The Biden administration says it’s designed to help those who need it most. Counterintuitively, those with smaller student loan balances tend to struggle more. It’s driven by millions of Americans who take out student loans but don’t finish degrees, leaving them with the downside of debt without the upside of a higher income.

In two separate lawsuits, Republican attorneys general in 18 states are pushing to have the plan tossed and to halt any further cancellation. They say the SAVE Plan goes beyond Biden’s authority and makes it harder for states to recruit employees. They say the plan undermines a separate cancellation program that encourages careers in public service.

It’s unclear what the suits could mean for loans that have already been canceled. A court document filed by Kansas’ attorney general says it’s “unrealistic to think that any loan forgiveness that occurs during this litigation will ever be clawed back.”

The lawsuits don’t directly address the question, and the attorneys general didn’t immediately respond to an Associated Press request.

The Education Department says Congress gave the agency power to define the terms of income-driven payment plans in 1993, and that authority has been used in the past.

Along with the repayment plan, Biden is trying again at a one-time student loan cancellation. In a visit to Wisconsin on Monday, he highlighted a proposal to reduce or cancel loans for more than 30 million borrowers in five categories.

It aims to help borrowers with larges sums of unpaid interest, those with older loans, those who attended low-value programs, and those who face other hardships preventing them from repaying student loans. It would also cancel loans for people who are eligible for other forgiveness programs but haven’t applied.

The Biden administration says it will accelerate parts of the proposal, with plans to start waiving unpaid interest for millions of borrowers starting this fall. Conservative opponents have threatened to challenge that plan, too.

On Friday the administration also said it’s canceling loans for 65,000 borrowers who are enrolled in older income-driven repayment plans and hit the finish line for forgiveness. It also announced cancellation for another 5,000 borrowers through the Public Service Loan Forgiveness program.

Through a variety of programs, the Biden administration says it has now provided loan relief to 4.3 million people, totaling $153 billion.