The U.S. Department of Education announced Friday that it will forgive $39 billion in college debt (34.75 billion euros) in the coming weeks for some 804,000 students whose debts are owed directly to the government.
“For too long, borrowers have been victims of a broken system that couldn’t manage forgiveness,” Education Secretary Miguel Cardona said in a statement. “Today, the Biden-Harris Administration is taking another historic step. By correcting those administrative failures of the past, we are ensuring that everyone gets the forgiveness they deserve, just as we have done for civil servants, students who were cheated by their colleges and borrowers with permanent disabilities, including veterans. This Administration will not stop fighting to level the playing field for higher education.” In his two and a half years in office, Biden is already the president who has forgiven the most debt in history.
The announcement comes two weeks after the Supreme Court struck down one of his Administration’s flagship measures, which forgave 43 million students $10,000 or $20,000 (Pell Grant recipients, an extensive federal loan program) of the commitments made to complete their university studies, a habit to which many are pushed by a system that prioritizes the search for profit. The measure involved the forgiveness of some $400 billion.
Biden’s Student Loan Forgiveness: Qualifications and Application Process
To do so, the Biden Administration relied on a provision of a law passed after 9/11 under the name HEROES. The gesture was one of the central arguments in the search for the youth vote for the presidential reelection campaign in 2024. The Supreme Court ruled that such a debt write-off was not admissible without going through Congress.
That was the last ruling of a judicial course that has certified the rightward turn of the most conservative court in eight decades, whose nine justices also ended affirmative action on racial grounds in college admissions. That same day, Biden appeared at the White House to criticize the decision and to announce that he would pursue “new avenues” to achieve its purpose. “My Administration’s student debt relief plan would have been the lifeline that tens of millions of hard-working Americans needed as they tried to recover from a pandemic unprecedented in a century,” he said.
Friday’s announcement, which affects Department of Education borrowers enrolled in plans whose payments depend on their income, is one such path. Those plans provide for forgiveness after 20 to 25 years. Management failures by the companies managing those debts have made those burdens more onerous, something the new measure is intended to remedy.
Biden also announced that he will seek to enact a different debt relief program under the Higher Education Act (1965), which gives the Secretary of Education the power to “compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.”
Since 1980, the total cost of four-year degrees at public and private universities has tripled, even accounting for inflation. According to a Department of Education analysis of a recent sample of college students, nearly one-third of borrowers are in default, but lack a degree. Many of them were unable to complete their degree because the cost of tuition was too high.
The next date marked on the payment due date calendar is early October. Then ends a hiatus decreed during the pandemic. Until that time comes, and like a student waiting for his or her test scores to be released, hundreds of thousands of alumni are now waiting to receive notification in the coming weeks as to whether or not they are eligible for the new forgiveness.