The Biden administration is officially withdrawing its sweeping proposals to cancel student debt for tens of millions of Americans, effectively closing the door on mass loan forgiveness in the waning days of Joe Biden’s presidency.
POLITICO previously reported that Trump transition officials and allies have been exploring ways to quickly wind down Biden’s various student debt relief programs.
The Education Department didn’t respond to a request for comment.
The Education Department has since been working on those plans that are based on a long-standing provision of federal higher education law that says the Education secretary can waive, compromise, and settle debts.
The Biden administration has continued to announce batches of loan forgiveness to borrowers under changes it made to existing federal relief programs.
In the final days of Joe Biden’s presidency, the Biden administration is formally rescinding its expansive plans to forgive student loans outstanding by tens of millions of Americans.
Two significant pending proposals to cancel student debt were revoked by the Education Department in a notice released Friday. One of the proposals was already preemptively blocked by a federal judge in a lawsuit filed by Republican attorneys general.
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The department was ordered to provide a court explanation of its plans for the remainder of the Biden administration by Friday by the judge in that case, Matthew Schelp of the Eastern District of Missouri, who was appointed by Trump.
The Education Department said that the administration wants to use its remaining time to prioritize “helping at-risk borrowers return to repayment successfully” and cited the “operational challenges” of implementing both rules as justification for the plans’ withdrawal. “.”.
In their letter, department officials also affirmed the plans’ legality, though the incoming Trump administration is probably going to disagree. Trump transition officials and supporters have been looking into ways to swiftly terminate Biden’s numerous student loan relief initiatives, according to a previous POLITICO report.
Regarding the retracted proposals, the White House remained silent. An inquiry was not answered by the Education Department.
The retracted proposals, which collectively considered some loan forgiveness for at least 38 million Americans, were marketed as Biden’s “Plan B” for eliminating significant student loan debt following the Supreme Court’s 2023 rejection of his original relief proposal.
Conservative justices decided in that 6-3 ruling that Biden could not dismiss $10,000 or $20,000 in student loan debt for approximately 40 million borrowers by using emergency powers linked to the Covid-19 pandemic.
Immediately following his Supreme Court defeat, Biden pledged to start a rulemaking process to develop new debt cancellation strategies. A long-standing clause in federal higher education law that states the Education secretary has the authority to waive, compromise, and settle debts has since served as the foundation for the plans that the Education Department has been developing.
About 30 million Americans who fall into specific categories—such as those whose debt has risen due to interest, those who have carried debt for decades, and borrowers who were not able to take advantage of current relief programs—would have had their debt forgiven under one of the proposals, which was unveiled in April.
The second proposal, which was made public in October, would have allowed the Education Department to forgive debts owed by borrowers it deemed to have faced financial difficulties. The department estimated that this would help about 8 million borrowers.
Under modifications it made to already-existing federal relief programs, the Biden administration has persisted in announcing batches of loan forgiveness to borrowers. It revealed an additional $4.28 billion in aid for 54,900 public servants on Friday. The administration has forgiven approximately $180 billion for almost 5 million Americans, according to officials.
