HOUSTON, TEXAS – JULY 25: Vice President Kamala Harris speaks to members of the American … [+]
Vice President Kamala Harris praised the Biden-Harris administration’s efforts to cancel student loans for tens of millions of borrowers.
“We see a future where no teacher has to struggle with the burden of student loan debt,” Harris said in a speech to the American Federation of Teachers on Thursday. “Our government has forgiven the student loans of nearly 5 million Americans,” including teachers and other public officials.
But Harris warned that Public Service Loan Forgiveness and other student debt relief initiatives are in jeopardy due to Republican opposition, and a Trump presidency could roll back and even eliminate these programs altogether.
Biden-Harris administration approves nearly $170 billion in student loan forgiveness
According to the Department of Education, the Biden-Harris administration has forgiven over $170 billion in student loans over the past 4 years. Although President Joe Biden’s original student debt cancellation plan was struck down by the Supreme Court last summer, the administration has managed to deliver this unprecedented relief by improving and expanding existing debt cancellation programs. The relief includes:
- $51 billion in student loan forgiveness for multiple million borrowers through the IDR Account Adjustment, a brief program designed to correct past problems with income-driven repayment plans.
- $28.7 billion in debt relief for at the very least 1.6 million borrowers who were misled by their schools or experienced a college closure while at school.
- Forgive $14.1 billion in student loans for greater than half one million borrowers with health disabilities.
- $5.5 billion in debt relief for 414,000 borrowers through accelerated student loan forgiveness under the SAVE Plan, a brand new IDR program to cut back monthly payments.
According to the ministry, nearly five million borrowers have benefited from these initiatives.
Harris praises success in forgiving student loans under the PSLF program
In her speech to the American Federation of Teachers on Thursday, Harris focused on the Public Service Loan Forgiveness program. PSLF can wipe out a borrower’s federal student loan debt after 120 so-called “qualifying” payments – which, if all eligibility criteria are met, is 10 years. Borrowers must commit to working in public service for nonprofit or government organizations, similar to public schools, during that point.
However, the PSLF program has been riddled with problems for years. Due to a mixture of complex eligibility rules, poor loan servicing practices, and inadequate oversight by the Department of Education, it was common for borrowers to make significant payments on their student loans only to later discover that they weren’t eligible for debt relief through PSLF. In some cases, borrowers ended up owing greater than they originally borrowed, despite years of payments.
Harris spoke of 1 particular teacher she recently met in Philadelphia. She was “the first in her family to go to college. And she had spent 20 years paying off her student loans, like many others,” Harris said. “And she told me, she said, ‘I’ve often wondered if I’m going to have to give up this profession that I love so much in order to pay my bills. But I didn’t give it up because I love what I do.'” Harris continued, “But she had to make decisions about what she could afford in terms of her day-to-day obligations and paying off those loans, and after 20 years, she still had $40,000 in student loans.”
“And we have forgiven everything,” Harris said to applause.
Before President Biden took office in 2021, PSLF had an abysmal approval rate that never hovered above one or two percent. But because of temporary waivers that relaxed key rules and recent regulations that went into effect last 12 months, the success rate for PSLF has skyrocketed. At least 946,000 borrowers have now received forgiveness of their student loans under this system — up from just 7,000 throughout the program’s entire lifespan from 2007 to 2020.
PSLF and other student loan forgiveness programs might be in danger
Harris warned that conservative plans to repeal student loan forgiveness programs, including PSLF, might be implemented if former President Trump returns to office. She pointed to Project 2025, a sweeping conservative policy proposal to restructure the federal government. Project 2025 calls for the repeal of several student loan forgiveness plans, including popular initiatives like PSLF that passed on a bipartisan basis long before President Biden took office.
“The new administration must end the previous administration’s abuse of payment pauses and HEA loan forgiveness programs, including defending borrowers from repayment, releasing them from school closures, and public service loan forgiveness,” the statement said. SuggestionIt also calls for an end to “interest subsidies or debt forgiveness” for IDR plans because this “essentially turns these student loans into deferred grant programs.”
“Congress should set policy – not presidents through phone-in orders, and not agencies through regulations and directives,” the proposal states. “Strengthened by an ever-expanding cabal of special interests that thrive on government largesse, the infrastructure that supports America’s costly government intervention in education from early childhood through graduate school has become entrenched. But unlike public sector bureaucracies, public employee unions, and the higher education lobby, families and students do not need a Department of Education to learn, grow, and improve their lives. It is critical that the next administration tackle this entrenched infrastructure.”
The Trump campaign has tried to distance itself from the initiative, but Trump himself has railed against Biden and Harris’ student loan forgiveness initiatives at recent rallies, calling them “disgusting.”
Lawsuits led by Republicans are already jeopardizing student loan forgiveness and repayment
Harris’ statement comes at a time when unprecedented chaos and uncertainty are leaving many federal student loan borrowers confused and frustrated. Last week, in response to one in all several lawsuits recently brought by Republican-led states and supported by conservative-leaning groups, a federal appeals court issued a preliminary injunction blocking President Biden’s recent SAVE plan. SAVE lowers payments and offers opportunities for student loan forgiveness later. At least eight million borrowers have enrolled within the plan.
The states, led by Kansas and Missouri, argue that President Biden has exceeded Congress’s authority by imposing such generous repayment terms on borrowers. The government counters that Congress created broad authority for IDR plans greater than 30 years ago and left it to the Department of Education to set rules for these programs throughout the limits of the law.
As a results of the recent court order, the Department of Education has imposed an administrative forbearance on tens of millions of borrowers. The forbearance will suspend payments and interest, but is not going to count toward student loan forgiveness for IDR or PSLF. The department has also temporarily shut down online applications for IDR and direct loan consolidation to modernize its internal systems and comply with the court order.
