Biden’s Parting Gift: Student Loan Debt Relief

In the waning days of Joe Biden’s presidency, his administration announced on Monday that it will provide student debt relief to 150,000 borrowers.

Almost 85,000 attended schools that defrauded their students; 61,000 have total and permanent disabilities; and 6,100 are public service workers.

“Since Day One of my Administration, I promised to ensure higher education is a ticket to the middle class, not a barrier to opportunity, and I’m proud to say we have forgiven more student loan debt than any other administration in history,” Biden said in a statement.

Education Department officials said that “many” borrowers had already been notified that they received relief, and some will be notified in the coming days. Officials declined to specify whether this would be the last student debt relief announcement.

Key context: More than 5 million borrowers have had about $183.6 billion in student loans forgiven since Biden took office, according to Education Department officials. But some of the president's most ambitious plans for student debt relief have been denied or tied up in litigation. Biden’s sweeping debt relief plan to cancel up to $20,000 of student debt for tens of millions of Americans was struck down by the Supreme Court in 2023. A popular loan repayment plan known as SAVE is held up in the courts.

The next administration: President-elect Donald Trump's transition advisers and outside allies have been discussing ways to unwind the various Biden-era initiatives that offered new or easier paths to loan forgiveness.

During Trump's first administration, then-Education Secretary Betsy DeVos denied nearly 130,000 applications for borrower defense, a process that allows borrowers who were defrauded by their schools to seek loan forgiveness. The Public Student Loan Forgiveness program, which forgives student loans for public service workers who’ve met certain requirements, had a 99 percent denial rate in 2017, according to the U.S. Government Accountability Office.

House and Senate requests: Lawmakers have been pressuring the Biden administration to forgive student debt for borrowers who have been defrauded by their colleges through the borrower defense rule.

Sens. Dick Durbin (D-Ill.) and Ed Markey (D-Mass), Rep. Maxine Waters (D-Calif.) and more than 70 of their colleagues sent a letter to Education Secretary Miguel Cardona in December asking him to “immediately discharge the student loans for the hundreds of thousands of students who the Department has already committed to providing borrower defense debt relief.”

The rule has been around since 1994, but borrower defense applications became more common in 2015 after revelations of widespread fraud led to the collapse of Corinthian Colleges, one of the country’s largest chains of for-profit colleges. Now there is an application backlog.

Though the Department has not shared its number with Congress or the public, an estimated 400,000 borrowers have pending applications for borrower defense discharge, according to the letter from Durbin, Markey, Waters and their colleagues.

Looking ahead: Education department officials told reporters on a call Monday that they don’t have a number to share in terms of the backlog. Officials said they have sent communications to borrowers whose applications have been approved last week confirming their entitlement to a loan discharge.