Will Biden Forgive Federal Student Loan Debt?

• Many lawmakers have lobbied Biden to use executive action to forgive federal loan debt.
• Biden promised $10,000 in debt forgiveness during his presidential campaign.
• The White House has yet to put forth any concrete plan of action in this arena.

For nearly a year-and-a-half, some 43.4 million borrowers have wondered the same thing: Will President Joe Biden cancel any of my federal student loan debt?

Biden's administration has been tight-lipped about any widespread debt forgiveness for much of his presidency. He campaigned on a promise of canceling debt for borrowers. But through nearly two years in office, he's instead opted for more targeted relief in the form of borrower defense claims and expanding bureaucratic forgiveness through programs like Public Service Loan Forgiveness.

The tides, however, seem to be turning.

A series of leaks and public statements from his administration suggest Biden may be on the verge of the forgiveness borrowers have hoped for. Even if, however, it's not the blanket cancellation some expected.

Here's what we know about Biden's thinking on and plans for federal student loan debt cancellation.

Cancellation Appears Imminent

Recent comments by Biden and insider reports suggest that the forgiveness the president promised may come any day now.

At the end of April, Biden confirmed that he was "taking a hard look" at canceling some federal student debt.

"I am considering dealing with some debt reduction," Biden said during a press conference announcing his request to Congress for a new Ukraine aid package. "I am not considering $50,000 debt reduction. But I'm in the process of taking a hard look at whether or not there will be additional debt forgiveness."

At that time, Biden said he'd make a decision on federal student debt cancellation in a matter of weeks.

The Washington Post reported in late May that White House officials plan to cancel $10,000 in federal student debt per borrower. While an announcement has yet to come, that same report stated that Biden had hoped to make the declaration Saturday, May 28 — during the University of Delaware commencement ceremony at which he was speaking.

However, the school shooting in Uvalde, Texas, just a few days prior to the ceremony delayed an announcement. And this week, The Wall Street Journal reported that Biden isn't likely to make any announcements on debt cancellation until July or August.

Whenever a decision is made, debt cancellation of $10,000 per person aligns with what Biden promised on the campaign trail.

“According to the Center for American Progress, $10,000 per borrower would completely wipe out the debt of 16.3 million borrowers — or 36% of all borrowers — with federal student loan debt.”

According to the Center for American Progress (CAP), $10,000 per borrower would completely wipe out the debt of 16.3 million borrowers — or 36% of all borrowers — with federal student loan debt. It would amount to approximately $371 billion in total loan discharges.

Student loan payments have been paused since March 2020 due to the COVID-19 pandemic. They are scheduled to resume after Aug. 31, and experts believe it's likely that an announcement on widespread cancellation would come before then.

Student Loan Forgiveness, But Not for All

Biden's debt forgiveness moves would not apply to all borrowers, according to reporting by The Washington Post.

The latest plans call for limiting forgiveness to those earning less than $150,000 the previous year. Additionally, married couples filing jointly can't have made more than $300,000 the year prior.

“Opponents of total cancellation have said such an act would unfairly benefit the privileged who may not need relief. An earnings ceiling may help assuage some of those concerns.”

Opponents of total cancellation have said such an act would unfairly benefit the privileged who may not need relief. An earnings ceiling may help assuage some of those concerns. CAP stated in its analysis that those with high salaries would benefit most from total loan debt cancellation and that income caps would create a more targeted approach.

However, The Washington Post's reporting said that such a stipulation would "add some complexity to the overall plan and its administration."

Some experts question whether borrowers would need to apply for forgiveness due to the income caps, thus adding bureaucracy.

"Millions of borrowers would likely be shut out of the system based on an application requirement," Bryce McKibben, senior director of policy and advocacy at the Hope Center for College, Community, and Justice, told Politico. "People are going to fall through the cracks."

The Department of Education does not have an information-sharing agreement with the Internal Revenue Service, which may necessitate an application process to get relief.

Details of Debt Forgiveness Remain Unknown

Despite Biden’s comments and various leaks, questions about cancellation remain.

For example: What kinds of loans will be forgiven?

Americans with Parent PLUS loans are still unsure whether they will be included in any widespread cancellation. While this is still a form of federal student loan debt, Parent PLUS borrowers often don't have access to some of the same discharge programs — like most income-driven repayment plans — as owners of other debt.

Tiara Moultrie, a fellow at the Century Foundation, argued in a recent commentary paper that these borrowers should be included in any cancellation. That's because, she said, history shows the program has placed unfair burdens on low-income families.

"Parent PLUS loans have the highest fees and interest rates of federal student loans, and the least access to repayment assistance and forgiveness," Moultrie wrote. "Furthermore, because there is no set cap on loan amounts, the Parent PLUS loan program often results in large debt loads."