- Biden has advocated writing off student debt of $ 10,000 per person and reforming loan programs.
- He has yet to deliver on his promises, but the government has begun work on reforming student debt.
- Lawyers and lawmakers say borrowers need more confidence from the Ministry of Education.
- See more stories on the Insider business page…
President Joe Biden has pledged to reduce the $ 1.7 trillion student debt crisis during his campaign, promising debt cancellation and reform of key student loan programs.
While admittedly early, Biden has yet to deliver on any of those promises. The most that can be said is that he begins to think about working on them, and it will take time to see the progress.
One of the first actions by the president in office was extending the pause in student loan payments during the pandemic, which has brought relief to 43 million borrowers. But in October, the pause is lifted, and borrowers, experts and legislators worry that the Biden administration is not doing enough to protect borrowers when this happens.
On Thursday, the Student Borrower Protection Center (SBPC), which protects the rights of borrowers, held 128 organizations in a call to extend the pause until Biden completes reform of its loan forgiveness and student debt cancellation programs.
“There is a long way to go to deliver on promises for student loan borrowers, from what was promised to where we are,” Seth Frothman, CEO of SBPC, told Insider. “A lot of this is obviously due to how broken the system is and how many problems we face we have been solving for decades.”
Here’s what Biden promised on student debt during his campaign, and what those promises are currently:
Biden has promised to write off $ 10,000 in student debt per person. IN speech On Nov. 16, he said student loans withhold borrowers and the $ 10,000 forgiveness “must be done immediately.”
His campaign Web site said he would work with Democrats to “allow student debt cancellation up to $ 10,000 per borrower” as part of the COVID-19 relief program, but he signed this was not the case in March.
When he took office, he told CNN’s town hall in February that he was “willing to write off a $ 10,000 debt, but not $ 50. [thousand]because I don’t think I have the right to do so. “
Office of Justice and Education overview Biden has executive powers to cancel the $ 50,000 debt, but he has yet to write off even $ 10,000.
Biden also campaigned forgiving all federal student loan debt related to tuition fees for borrowers from public colleges and universities with incomes up to $ 125,000 a year, as well as private colleges and historically black universities (HBCUs) and institutions serving minorities.
Biden provided funding for the HBCU in both his stimulus proposals and infrastructure, but not in the broader forgiveness plan.
Some HBCUs have used Biden’s incentive money to cancel debt for their students. But given the disproportionate burden of student debt on black borrowers, organizations keep calling for the president to cancel their debt.
The Public Service Loan Forgiveness (PSLF) program is supposed to forgive student debt for government employees after 120 eligible monthly payments, but it has been known to be flawed by continuing reject 98% of applications… Biden promised to fix the program, and these fixes are currently in development.
Biden regulatory agendareleased earlier this month included plans to reform the PSLF as well as correction “Borrower protection until repayment,” which forgives loans to students defrauded by commercial schools.
However, the implementation process for these improvements could be lengthy as the department expects to finalize the new regulations by April 2022. He held a public hearing this week to collect feedback on the loan system and will soon determine the way forward for developing the rules.