President Biden’s Complete Track Record on Student Loan Forgiveness

• President Joe Biden has approved more student debt discharges than any previous administration.
• Biden's proposed initial plan for widespread debt forgiveness was struck down by the U.S. Supreme Court, leading to a “Plan B” approach.
• The Biden administration has targeted for-profit colleges and universities with ad hoc forgiveness for former students at these institutions.
• Changes have been made to existing debt forgiveness programs, such as adding a new IDR plan with a quicker pathway to forgiveness.

President Joe Biden campaigned on the promise of student loan debt forgiveness, and his first three years in office have offered a mixed bag of successes and failures.

Most notably, Biden's widespread debt forgiveness plan proposed in August 2022 failed in the 11th hour due to a 6-3 U.S. Supreme Court decision.

The court declared the president did not have the legal authority to forgive up to $20,000 in federal student loans per borrower through the HEROES Act, much to the disappointment of the 26 million Americans who applied or were automatically eligible for one-time forgiveness.

However, despite this high-profile loss, the president has celebrated numerous victories in the fight against the debt crisis.

As of mid-March 2024, Biden's administration has approved debt cancellation for 3.96 million borrowers totaling almost $143.6 billion in forgiveness since taking office in 2021. That far outpaces any student loan debt forgiveness from any previous administration.

Widespread Debt Relief Plan Falls Short

Biden proposed a plan in August 2022 that would have canceled up to $10,000 in federal student loan debt for most borrowers and up to $20,000 for those who received a Pell Grant while in college. His plan would only have applied to a borrower making less than $125,000 per year or couples with a joint income below $250,000.

This proposal, however, never made it to the finish line.

Why the One-Time Relief Failed

The U.S. Supreme Court ruled on June 30, 2023, that Biden's debt forgiveness plan was unconstitutional.

The court's decision ultimately came down to whether the president had the authority to erase student loan debt using powers granted by the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act).

The majority decision stated that while the act allows the president to modify the federal student loan system during an emergency, it does not allow the Department of Education (ED) to conjure new policy whole cloth.

Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson were the only judges who opposed the court's decision.

Stephanie Hall, senior director of higher education policy at the Center for American Progress (CAP), told BestColleges she doesn't believe the Supreme Court's actions will reflect negatively on Biden's legacy on student loan debt relief. That's a mark the court itself will have to bear in the eyes of the general public.

Debt Forgiveness 'Plan B' Incoming

President Biden wasted little time in pivoting.

The same day the Supreme Court revealed the decision, the Biden administration announced a “Plan B” attempt at providing widespread federal student loan debt relief. This time, ED would lean on powers granted through a process known as negotiated rulemaking to reach borrowers.

The process is ongoing, as ED finished the final negotiation session with other higher education stakeholders in late February.

Some aspects of the proposal may still change before it goes up for public comment, but the proposal will likely cover the following groups of borrowers:

• Borrowers who first entered repayment 25 years ago
• Borrowers whose current balance is more than the original amount they borrowed
• Borrowers who attended a career-training program that led to unreasonably high debt or unacceptably high loan default rates
• Borrowers who would have qualified for forgiveness under another forgiveness program, like Public Service Loan Forgiveness (PSLF), or a repayment plan but never applied
• Borrowers experiencing hardship

The Plan B debt relief program would be more limited in scope than Biden's initial one-time forgiveness plan. The more limited scope may, however, allow the proposal to survive litigation and another potential visit to the Supreme Court.

Biden will likely aim to implement the plan before the general election in November.

Hall said that if successful, this Plan B will be what people remember when they think about Biden's track record on loan forgiveness.

To me — and I might just be flying high after negotiations ended so well — I think that's going to be his legacy, she said. It will be felt in very tangible ways for student loan borrowers.

Debt Relief for Former Students at For-Profit Colleges

President Biden quickly took aim at for-profit colleges and universities, as many of his debt forgiveness actions have targeted former students at these institutions.

Settlement Grants Forgiveness to 200,000 Borrowers

The Biden administration agreed to settlement terms in mid-2022 for a case involving 200,000 borrowers and 155 (mostly) for-profit institutions.

The case — Sweet v. Cardona — stems from a backlog of borrower defense to repayment claims. Borrower defense allows federal student loan borrowers to request relief if they feel their college or university defrauded them. However, ED stopped processing borrower defense claims under former President Donald Trump's administration, creating a massive backlog of claims.

Borrowers filed a class-action lawsuit against ED in 2019, and the department later settled.

Students who attended any of the 155 institutions listed in the settlement with borrower defense claims pending as of June 22, 2022, qualified for complete forgiveness. ED also promised to decide another 64,000 pending claims using standards favorable to the borrowers, according to the settlement.

Ad Hoc Forgiveness for Students From Other For-Profits

In addition to the settlement, ED has granted piecemeal debt forgiveness for former students at other for-profit institutions.

Generally, these schools exhibited some signs of predatory or unscrupulous behavior, according to the department. They were often also spurred by an influx of borrower defense claims directed at the college or university.

Changes to Existing Debt Forgiveness Programs

The federal government has a handful of federal student loan debt forgiveness programs, but many of these programs had gone underutilized for decades.

Biden has seemingly made it a higher education priority to change that fact.

One-Time Fixes to Existing Programs

One of the first debt forgiveness acts Biden initiated after taking office was creating a limited waiver for borrowers seeking debt cancellation through the Public Service Loan Forgiveness program. PSLF rewards public servants who work for at least 10 years at a nonprofit or government agency with complete forgiveness of federal student loan debt.

However, before Biden took office, the program had gone underutilized.

That was largely because borrowers needed to be part of the Direct Loan program to benefit from PSLF. The waiver allowed people to consolidate their loans into the Direct Loan program and have past payments counted toward the timeline to forgiveness.

Near the end of the waiver program, ED said approximately 236,000 borrowers benefit from the waiver. It waived more than $14 billion in student loan debt as a result and continues to grant PSLF forgiveness as late as March 2024.

Biden later rolled out a one-time account adjustment for borrowers on an Income-Driven Repayment (IDR) plan. IDR plans bring monthly payments down for low- and middle-income borrowers with the promise of debt elimination after 20-25 years of repayment.

Similar to PSLF, many borrowers hadn't seen the full benefits of IDR due to the program's complexity.

The one-time account adjustment benefited borrowers who made late or partial payments on their loans, were in extended forbearance, or spent time in deferment. These instances would be counted toward the timeline to forgiveness.

Hall said the IDR account adjustments have snagged prominent headlines. So while the average American may not be as familiar with Biden's other student debt relief actions, many are acutely aware of what he has done for borrowers on IDR plans.

It's risen to the level that the general public is aware, she said.

Approximately one year after launching the account adjustment, ED revealed that it helped erase $39 billion in loan debt for 804,000 borrowers.

Borrowers with a commercially managed Federal Family Education Loan (FFEL) or Perkins loan have until April 30, 2024, to consolidate and benefit from the IDR waiver.

New IDR Plan Offers Quicker Pathway to Debt Relief

The Saving on a Valuable Education (SAVE) plan — Biden's new IDR plan — launched in July 2023.

The SAVE plan offers significantly lower monthly payments compared to existing IDR plans. On top of that, it also provides a pathway to forgiveness before the standard 20 or 25 years of repayment that accompanies other IDR plans.

Those who originally borrowed $12,000 or less in student loans qualify for automatic debt forgiveness after 10 years of making payments. For every $1,000 borrowed above $12,000, a borrower must add one year to the timeline for forgiveness.

ED announced in February that it would discharge $1.2 billion in federal student loans, benefitting 153,000 borrowers, through this mechanism.

Changes to PSLF, Borrower Defense Through Rulemaking

Through a bureaucratic process known as negotiated rulemaking, Biden's administration overhauled additional debt forgiveness programs since taking office.

ED expanded the list of people who could benefit from PSLF, much to the benefit of teachers and adjunct faculty at public colleges and universities. The department's proposed changes in December 2021 also added to the list of deferments and forbearances that a borrower could be in and still qualify toward the timeline to forgiveness.

During that same negotiated rulemaking session, ED expanded the scope of the following programs:

• Total and permanent disability discharge
• Closed school discharge
• Borrower defense to repayment

The borrower defense rule was held up in the courts but ultimately made its way to becoming part of the new official regulations.