As the United States gears up for the November polls, President Joe Biden’s influence on the financial situation of approximately 4 million Americans is evident. His administration has forgiven more student debt than any previous one. However, a significant legal hurdle encountered last year by his signature debt relief program may leave some voters feeling short-changed.
In 2022, the Biden administration informed 16 million people via email that they were eligible for student loan forgiveness under a new program. However, the Supreme Court later struck down this program, resulting in no debt being cancelled under it. This has left many scrambling, having made financial decisions based on expected debt relief.
Despite this setback, the Biden campaign views student debt forgiveness as a key issue. The administration has simplified the process for certain groups of borrowers to qualify for student loan debt forgiveness under existing programs. These groups include public-sector workers, disabled borrowers, and victims of fraudulent for-profit colleges.
Since Biden took office, his administration has approved the cancellation of approximately $144 billion in federal student loans. This equates to 9% of the $1.6 trillion of federal student loan debt currently held by borrowers. However, this is only about one-third of the amount that would have been cancelled under the rejected forgiveness program.
The administration is currently developing another student loan forgiveness program, which will rely on a different legal authority. Details of this new program are expected to be released later this year. In addition, debt cancellations under existing programs continue, and a repayment plan launched last year will make it easier for many current and future borrowers to repay their debt.
Regarding the Supreme Court decision, Biden has repeatedly expressed his belief that the justices, three of whom were appointed by former President Donald Trump, made a mistake. The Trump campaign, on the other hand, has hailed the decision as a “massive win”.
Democratic Sen. Elizabeth Warren, who initially urged Biden to cancel up to $50,000 of student loan debt per borrower, believes the choice for voters in the 2024 election is clear when it comes to student debt forgiveness. She contrasts Biden’s efforts to cancel as much debt as possible with Trump’s attempts to block access to student loan debt cancellation during his presidency.
While the Trump administration made it more difficult for borrowers to qualify for some forgiveness programs, Biden has reversed these changes and is working to reduce the backlog of claims. So far, he has cancelled $22.5 billion for more than 1.3 million borrowers through the borrower defense program.
Despite the progress made in tackling student loan debt, there has been little change in federal policy to address the core underlying issue: the high cost of college. Both Warren and Biden have proposed making public colleges free, but these proposals have yet to be voted on in Congress.
As the political landscape continues to evolve, the issue of student loan forgiveness remains a key concern for many voters, particularly young ones. The upcoming election will undoubtedly be a crucial moment in determining the future of student debt policy in the United States.
Contributor: Ariel Edwards-Levy, CNN