Links to Information and Reporting on Biden's New Student Loan Forgiveness/IDR Policies
President Biden will announce today that the administration will forgive $10,000 in student loans (and $20,000 for Pell Grant recipients) for individual debtors earning less than $125,000 per year or couples earning less than $250,000 per year. He will also announce an extension of the student loan repayment pause and new income-driven repayment policies. The following is a list of useful links to information and reporting on the new policy:
From the White House: "Today, President Biden is announcing a three-part plan to provide more breathing room to America’s working families as they continue to recover from the strains associated with the COVID-19 pandemic.... To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022."
From the U.S. Department of Education: "'Earning a college degree or certificate should give every person in America a leg up in securing a bright future. But for too many people, student loan debt has hindered their ability to achieve their dreams—including buying a home, starting a business, or providing for their family. Getting an education should set us free; not strap us down! That’s why, since Day One, the Biden-Harris administration has worked to fix broken federal student aid programs and deliver unprecedented relief to borrowers, ' said U.S. Secretary of Education Miguel Cardona."
From Inside Higher Education: "The announcement marks an unprecedented act of executive authority and will be the first broad-based debt cancellation effort in history... For some borrowers, the cancellation will not be automatic. The Education Department only has income information for around eight million borrowers who are enrolled in income-based repayment plans or other programs that require them to submit information on their income. Other borrowers will have to submit an application, which White House officials said the Education Department will release more information on that in the 'coming days and weeks.'”
From the Chronicle of Higher Education: "The plan to cancel student-loan debt is expected to be challenged in court... The administration also proposed a new income-driven repayment plan that would reduce future monthly payments for lower- and middle-income borrowers. The proposed rule would cut the percentage of discretionary income borrowers are required to pay back each month for undergraduate loans from 10 percent to 5 percent, and would forgive loan balances after 10 years of payments, instead of 20 years, for certain borrowers."
From Higher Ed Dive: "The focus on Pell Grant recipients, and an income limit, signals the administration’s desire to target forgiveness to those most in need. However, Biden’s use of means testing chafed some progressives and policy experts."
From Politico: "Senate Majority Leader Chuck Schumer, a leading proponent of canceling student debt, urged Biden to provide as much relief to borrowers as possible during a phone call with the president on Tuesday evening, according to a Democrat familiar with the discussion. The call followed a discussion that senior White House officials, including chief of staff Ron Klain, had with Schumer and Sens. Elizabeth Warren (D-Mass.) and Raphael Warnock (D-Ga.), the leaders of the effort to convince Biden to cancel student loan debt ever since he took office. In a statement after the White House confirmed the plan Wednesday, Schumer praised the overall decision as the 'single most effective action that the president can take on his own to help working families and the economy.'”
In light of possible legal challenges, it is worth noting that ED released a memorandum today from its General Counsel, outlining the administration's authority to cancel student debt via executive action and critiquing/rescinding an earlier memorandum that had been written by ED's General Counsel's Office during the Trump administration.