President Biden wants you to know that he has been trying to cancel your student debt. Since last June, when the Supreme Court struck down Biden’s proposed attempt to discharge student debt, the White House has sent out an average of a press release every other week, touting his efforts. But all that bang hasn’t corresponded with an equal measure of buck. Approximately 4 million people have had their debts canceled by the Biden administration—a radical method of wealth redistribution that borrowers experience as life-changing. Just last week, Biden announced that an additional 167,000 student debtors will have their debt canceled through the Public Service Loan Forgiveness program. But while Biden is cancelling debts in batches of thousands, the needs is in the millions. Some 40 million people remain locked into student loans. While these debtors are being told the president is doing everything he can to cancel their debt, they are actually experiencing something very different from relief. In October 2023, after a three-year payment pause—first declared by President Trump and then extended seven times by President Biden—Biden turned the requirement for loan repayments back on; since then interest rates have been spiking. For millions of debtors, the gap between lofty rhetoric and crushing debt felt like presidential gaslighting.
To be sure, the president’s efforts to cancel debt have not been insignificant. In the last year, the president has reduced the total amount of student debt by roughly 10 percent, clearing the balances for some 4 million people. Yet a policy that leaves 90 percent of debtors without relief hardly seems like doing everything he can. For one thing, Biden has extended the government’s contract with MOHELA, the loan servicer whose shameful performance was at the center of the lawsuit that struck down broad-based cancellation. As members of Congress—including Representative Chuy Garcia, Representative Ilhan Omar, Representative Greg Casar, Representative Ayanna Pressley and Senator Ed Markey—declared at a press conference last week, as long as MOHELA is still doing business with the Department of Education, the administration is not doing everything it can to fix the student debt system. Instead, the loudest voices calling to hold MOHELA accountable are coming from student debt activists and organizers—not from Biden. Last week, members of the Debt Collective, including myself, disrupted the Student Loan Servicers Alliance’s conference, demanding information about why the multibillion-dollar company couldn’t bother to appear at a Senate hearing, why they are illegally auto-debiting people’s accounts, why they allowed themselves to be pawns in Republican attorneys general’s lawsuits, how they justify the nine-hour hold times borrowers routinely experience. One loan executive, after experiencing a three-minute disruption, burst into tears; the entire room packed up and left. They offered no response to the debtors’ queries.
The bulk of Biden’s cancellations have occurred through long-overdue fixes to existing relief programs, such as those designed for public-sector workers, students who attended fraudulent schools, and changes to the notoriously flawed income-driven repayment program. (In 2021, of the 4.4 million people who were eligible for cancellation under the income-driven program, only 32 had actually gotten relief.) As part of those changes the Department of Education repackaged the income-driven repayment program into a new initiative called SAVE. Although SAVE was greeted by an unusual amount of fanfare from student loan advocacy groups—such as the Student Debt Crisis Center and the NAACP—relief to borrowers has been, thus far, modest at best. Theoretically, SAVE loosens the criteria for borrowers to lower their monthly payments. But creating a system that relies on technocratic means-testing to determine how much families can afford to pay creates its own perverse consequences. Single mothers end up with higher monthly payments than double-income, no-kids households. A person who decides to leave an abusive spouse will face greater monthly payments than if they had remained in an unsafe relationship. Perhaps most cruelly, the program calibrates benefits with scientific precision to federal food insecurity levels—leaving borrowers with enough discretionary income to hover just above hungry—but not to ever get comfortably full. “It would be better titled the STARVE program,” Thomas Gokey, policy director of the Debt Collective—the nation’s first union of debtors—told me.
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Relying on these complex, means-tested formulas is a strange way of admitting that millions of student debtors are struggling to make ends meet—while not actually relieving most of them of this burden. Meanwhile, SAVE’s technical glitches have mired student debtors in administrative errors and wildly miscalculated monthly bills. While SAVE is billed as a total transformation of the income-driven repayment system, at best it merely offers overdue tweaks. Meanwhile, debtors face the steady onslaught of payments due.
Yet even these minor modifications have come under fire from Republican lawmakers. In April, 11 red-state attorneys general filed a lawsuit against the SAVE program, challenging the part of the plan that adjusts the goalpost for loans to be discharged. These states, scrambling for standing to sue in order to thwart any debt relief, argue that changes to the income-driven programs will undercut their ability to recruit public sector lawyers—currently eligible for loan relief under the Public Service Loan Forgiveness program. David Dayen has pointed out the ridiculousness of this claim: “AGs are attempting to stop a loan forgiveness program by pointing to a different loan forgiveness program.” While the red-state plaintiffs may be using PSLF as a shield, the actual sword of their argument glints through: Student debt is an important means of disciplining the labor force—don’t you dare take it away. These recent lawsuits highlight the very real and ongoing threat that any effort at broader cancellation will face since even mild tweaks have drawn right-wing wrath.
Biden’s failure to act on student debt has cost him with the voters he needs the most, a political liability aggravated by his nearly unconditional conditional support for Israel’s assault on Gaza; astonishingly, Trump now leads Biden among voters aged 18 to 44.
Yet there is still time for Biden to change course. The White House retains full authority to cancel student debt. Canceling debt quickly, completely and with conviction may be the strongest legal strategy. On both technical and political grounds, it is much more difficult to reimpose debt that has been canceled than to stop cancellation from happening in the first place. And the electoral benefits are hard to overstate.
Should Biden lose the White House, opportunities for student debt cancellation vanish with him—and may not come back for years. In the final years of the Obama administration, the Department of Education sat on its hands as hundreds of thousands of defrauded borrowers who attended for-profit colleges filed claim after claim for their debts to be discharged. These borrowers had ample evidence of fraud, clear legal authority, and a strong grassroots campaign. Yet the Obama administration chose to slow-walk the process, which Trump’s secretary of education then did everything in her power to utterly sabotage. Eight years later many of those borrowers are still waiting for relief—relief that Biden is bragging about delivering and, worse, failing to deliver despite a court-ordered mandate to do so.
Biden’s current efforts to address the student debt crisis might be better described as modifications to loan collections, rather than debt cancellation. Most debtors have only experienced announcements, not action; received press releases, not cleared balances. If Biden wants to get serious about canceling student debt, he could start by saying a little bit less—and doing much, much more. “Actually discharge borrowers’ loans, and then notify them of the changes to their account,” Gokey told me. When he wants to use his executive authority quickly, Biden knows how to do it. Just last week, he notified Congress—without waiting for their permission—of his plans to deliver a billion dollars of additional military aid to Israel. Where is that same speed, clarity of conviction, and urgency when it comes to 40 million student debtors?
