Democrats’ Priorities for Biden on Student Loans Before Leaving Office
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President Joe Biden addresses student loan debt relief at Madison Area Technical College in Madison, Wisconsin, on April 8. [Getty Images ]
As President Joe Biden nears the end of his term, some Democratic lawmakers are pushing for further action on student loan forgiveness, especially for those who were defrauded by their schools. The Biden administration has already approved significant student debt relief, but many of the affected borrowers are still waiting for their loans to be discharged. With President-elect Donald Trump preparing to take office, there is growing concern that these actions may not be completed before the administration transitions.
Biden’s approval of student loan debt relief has been more extensive than that of any other president. However, his efforts were hampered last year when the Supreme Court struck down a key proposal aimed at providing broad student loan forgiveness. Many Republicans have criticized Biden’s actions, arguing that they unfairly shift the financial burden onto taxpayers who either did not attend college or who have already repaid their student loans.
Biden’s student debt relief was primarily targeted at specific groups of borrowers, with many benefiting from programs that predated his presidency. Despite these efforts, Democrats are pressing for additional action, particularly for borrowers who were defrauded by their educational institutions. These individuals, who sought to improve their prospects through education, instead found themselves burdened with debt after attending schools that misled them. Senator Ed Markey of Massachusetts, speaking at a press conference on student debt, expressed his frustration with the situation: “These borrowers set out to pursue the American dream, but instead of earning a diploma that unlocked the doors of possibility, they found themselves being shackled with a worthless degree and the burden of student loan debt.”
Under the Trump administration, student loan forgiveness for defrauded borrowers was delayed. Now, ahead of Biden’s departure, numerous Democrats are urging his administration to finalize the debt forgiveness for those who were deceived by their schools. The Department of Education has already approved nearly $29 billion in loan forgiveness for about 1.6 million defrauded borrowers, but many are still waiting for their debts to be canceled. Former students of for-profit colleges like Corinthian Colleges, the University of Phoenix, and The Art Institutes have been particularly affected. As of fall 2024, about 135,600 former Corinthian students were still waiting for their loans to be discharged. The complexity of processing these discharges, particularly for borrowers who consolidated their loans, has caused delays.
In early December, a group of over 70 Democrats urged the Department of Education to immediately process the debt relief for defrauded borrowers. The discharges were approved under the borrower defense to repayment program, which provides relief for borrowers who were misled by their colleges. Legal experts believe that even if the discharges are not processed before Biden leaves office, the Department of Education will still be obligated to complete the discharges.
Additionally, lawmakers are calling for the Department of Education to approve further loan forgiveness through borrower defense. There are other schools that have been found to have committed fraud, making their former students eligible for relief. Democrats are concerned that the incoming Trump administration may alter the borrower defense rules, potentially making it more difficult for borrowers to receive the relief they deserve. Rep. Bobby Scott of Virginia warned that if the new administration succeeds in changing the rules, it could be “significantly harder – and potentially impossible” for borrowers to obtain debt relief.
The Biden administration also created a plan known as SAVE (Saving on a Valuable Education), which offers debt relief for a wide range of borrowers. However, this plan is currently being challenged in court by Republican-led states, with a ruling expected soon. Borrowers enrolled in the SAVE plan are not required to make payments while the case is litigated. While this forbearance offers some relief, it could delay loan forgiveness for some borrowers, as the time spent in forbearance does not count toward the number of payments needed for debt cancellation under programs like Public Service Loan Forgiveness (PSLF). PSLF provides loan forgiveness to public sector workers after they make 120 qualifying payments.
To address these concerns, Rep. Scott has urged the Department of Education to help borrowers who are enrolled in SAVE and also eligible for PSLF. As of last week, the Department of Education announced that borrowers could switch to older repayment plans, such as Pay As You Earn (PAYE) or Income-Contingent Repayment (ICR), to ensure that their payments count toward debt relief.
As the Biden administration draws to a close, it faces mounting pressure from Democrats to finalize student loan forgiveness for those defrauded by their schools and to ensure that borrowers enrolled in the SAVE plan are not left in limbo. The fate of student loan forgiveness hangs in the balance as the country approaches a change in leadership.
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