The Biden Administration continues to seek ways to reduce the debt load of many individuals and families who still hold higher-education loans. Bureaucrats are circumventing Congress and working within their purview at the rulemaking and programmatic level. The student loan crisis is undoubtedly a big political issue for many Americans, with tens of thousands of dollars at stake for 43.6 billion federal student loan borrowers. Debt forgiveness was dangled in front of them in the last presidential campaign. Meanwhile, Congress’s legislative bodies are unwilling to pave the way for such an enormous write-off that will simply be kicked down the road and borne by those who have already paid off their own loans or who have chosen to forego higher education.
Student Debt By the Numbers

According to educationdata.org and lendingtree.com’s latest statistics from 2023, Americans owe $1.77 trillion in student loan debt, $128.77 billion of which is private student loan debt. There are 43.6 billion borrowers with federal student loan debt with an average balance of $37,718. The average public university student borrows $32,637 over the course of earning a bachelor’s degree.
President Biden Initiatives to Reduce Debt Load

In January 2024, President Biden took credit for canceling student debt for 3.6 million people through several different initiatives. The administration has approved billions of dollars in student loan forgiveness during the past two years, and more than 3 million people have had their debt canceled.
Vehicles and Programs Available for Loan Forgiveness

The programs used to implement these debt reductions include Public Service Loan Forgiveness (PLSF), expanding and continuing former President Trump’s CARES Act, which suspended federal student loan payments, interest, and collection, and creating new programs to help those with specific needs to lower payments.
Income-Driven Repayment Plans

President Biden has also proposed expanding income-driven repayment plans to make them more accessible for lower earners. These plans cap monthly student loan payments at a percentage of the borrower’s discretionary income and provide forgiveness after a certain number of years of qualifying payments.
Supreme Court Strikes Down Broad Authority

The Biden Administration has been hindered in its approaches to debt forgiveness by the 2023 Supreme Court decision striking down the administration’s executive authority to make broad and sweeping financial decisions regarding public debt without the underpinning of legislative and Congressional support. As a pivot, the administration has sought out ways to move around the behemoth of the U.S. Congress, which is unlikely to grant Biden a substantial win, especially in an election year.
Working Around Congress

To get around the U.S. Congress, the administration favors targeted relief efforts, including redefining and relaxing eligibility rules within existing programs over which it has ultimate control.
Accelerated SAVE Plans for Those Who Owe Less

To this end, in January, the Department of Education announced they would start administering a program in February to accelerate student loan forgiveness for individuals with loan balances under certain thresholds who are participating in new SAVE plans.
Details of Plan

SAVE plans allow individuals to pay off their debt based on affordable payments tied to their income. After the period of the program– generally 20-25 years, the remaining balance will be forgiven.
Low-Balance Plans

The specifications of the program will be altered for those with smaller starting balances– under $12,000, allowing them to complete their obligatory repayments in as little as ten years. The program applied to low-balance debt holders on a truncated timeline is set to begin this month rather than the initially projected timeline of late summer.
Hardship Considerations

Another method the Department of Education is evaluating involves a hardship consideration in assessing student loan forgiveness. The Department has been working to put together this program since the Supreme Court effectively canceled the Biden Administration’s plans for debt forgiveness by ruling the president lacked the authority to unilaterally cancel billions of dollars of debt without action from Congress.
Who May Qualify for Hardship Loan Forgiveness

Under the hardship consideration, individuals who have been in repayment status for long periods or who were victims of predatory lending would be considered for forgiveness. Additionally, individuals who experience hardships could qualify, although how the Department of Education will define and identify such individuals has yet to be made known.
Rulemaking Hearings Underway

The hardship designation will likely be elaborated upon later this month when the Department of Education holds an administrative rulemaking hearing on hardship loan forgiveness on Feb. 22 and 23. Hardship categories may include the disabled, low-income individuals on public assistance or people who have declared bankruptcy. Regulations for this program will likely be forthcoming within the year.
Victims of Predatory Schools

A substantial amount of bureaucratic effort in the Department of Education in 2023 went into regulating relief under the Sweet v. Cardona settlement, a class-action lawsuit that accused the Department of Education of mishandling decisions relating to discharging debts under the borrower defense to repayment program. This program was initially implemented to provide $6 billion in loan forgiveness, refunds, and credit reparations for students who attended predatory schools that either misrepresented opportunities to students or engaged in fraudulent behavior.
Working Within Constitutional Constraints

With the limited authority given to the president, the administration is testing and implementing an array of ideas for debt forgiveness, including acceleration for those with lower balances, hardship considerations in forgiveness, and public service loan forgiveness. Congress is unlikely to rubber stamp any forgiveness, as many Americans do not believe it is fair to write off tens of thousands of debt that American adults have taken on voluntarily. Still, much can be achieved by working within the constraints of the divided government.