The Biden administration announced on Friday that it’s pulling back on its latest plans to forgive student loan debt for millions of Americans, leaving many feeling disappointed and frustrated. These proposals had the potential to wipe out debt for tens of millions of borrowers, offering much-needed relief for those struggling financially.
Why the change? U.S. Education Secretary Miguel Cardona explained that the Department of Education has limited resources and prefers to focus on helping borrowers who are at risk of default successfully get back on track with their repayments. On top of that, these plans would likely face legal challenges and could be undone once a new president, like President-elect Donald Trump, takes office.
In a statement, Cardona said the department would dedicate its energy to helping borrowers manage their repayments, instead of pushing forward with the controversial proposals. This move effectively ends one of President Biden’s most ambitious efforts to tackle the student debt crisis, and it has left some advocates feeling like the government missed another chance to fix the issue.
Conservative critics, on the other hand, argue that the cancellation plans were a misguided attempt to win votes and shift the burden onto taxpayers who never went to college or have already paid off their loans. Sen. Bill Cassidy, a Republican from Louisiana, called the plans a “lie” and criticized the administration for attempting to pass the debt onto others.
The decision is a reminder of the challenges Biden’s team faced in trying to provide wide-reaching student loan relief. Despite forgiving around $180 billion in student loans for 5 million Americans, many of Biden’s broader plans were stymied by legal battles and opposition from Congress.
The plans that are now being scrapped included a proposal to forgive up to $20,000 of unpaid interest for more than 20 million borrowers. Another plan would have helped borrowers at risk of default, focusing on those with preexisting debt, low income, or high expenses. A third proposal aimed to provide debt relief to those facing financial hardship due to medical bills, natural disasters, or childcare costs.
Advocates for borrowers were upset by the decision, feeling that the administration had let an opportunity slip by. Braxton Brewington, spokesperson for the Debt Collective, expressed frustration, saying that while the plans were unlikely to succeed, it was disappointing that so much time had been wasted without real progress.
In addition to the student loan decision, the Department of Education also rescinded a proposal to clarify the rights of transgender athletes, along with changes to rules about college accreditation and textbook fees. However, some other regulations, like expanding access to college programs for undocumented students, may still make it through before Trump takes office.
Overall, it’s been a tough week for those hoping for meaningful change on student debt and other key issues.
