Biden Finally Got Around To That ‘Immediate’ Student Loan Forgiveness He Promised

President Joe Biden announced a plan Wednesday that will forgive $10,000 of student loans for people making less than $125,000 a year. As you’d expect, there’s been pushback on the right, with Fox news derisively calling this a “handout” and Republican lawmakers threatening to try to block the move.

Meanwhile, pretty much everyone else is disappointed by the plan for not going nearly far enough. $10,000 is barely a drop in the bucket of most people’s student debt, which come with out-of-control interest rates, especially during this current period of massive inflation.

What Biden’s plan does

The part of Biden’s plan that’s getting the most attention is that $10,000 forgiveness, which issues another $10,000 for anyone who meets that income threshold and who also received a Pell Grant, which almost exclusively go to students in families that make less than $60,000 per year.

It also extends the pause on student loan payments through the end of the year, for what Biden calls “one final time.” Additionally, the Department of Education has a new income-based plan to cut monthly undergraduate loan payments in half and also aims to fix the “broken” Public Service Loan Forgiveness program to forgive some debt for anyone who has worked at a nonprofit, in the military, or in federal, state, tribal, or local government. There are also nice but far less tangible words about wanting to make college more affordable and having to “strengthen accountability.”

What Biden’s plan doesn’t do

Obviously the most notable thing missing from Biden’s plan is total debt forgiveness, which is what pretty much everyone wants who doesn’t buy into that “I struggled so everyone else should struggle” mindset that’s so pernicious. It also doesn’t seem to offer any assistance to anyone over the income threshold. There are other restrictions as well that exclude those who had an original loan balance of more than $12,000, including a proposal to forgive all debt after 10 years instead of the current 20.

So many student loans come with predatory interest rates so high that a person’s debt can increase even as they’re making regular payments on their principal. The Education Department’s new proposed income-based repayment plan purports to “cover the borrower’s unpaid monthly interest” but it’s not clear which borrowers that actually applies to.

Student debt is also a racial justice issue, as Black families, and especially Black women, are disproportionately impacted. The White House Fact Sheet for this plan states:

Black students are more likely to have to borrow for school and more likely to take out larger loans. Black borrowers are twice as likely to have received Pell Grants compared to their white peers. Other borrowers of color are also more likely than their peers to receive Pell Grants. That is why an Urban Institute study found that debt forgiveness programs targeting those who received Pell Grants while in college will advance racial equity.

Student debt forgiveness is believed to be a strong step to narrowing the racial wealth gap. But $10,000 doesn’t seem likely to be a large enough amount to make much of a difference. The ACLU recommends cancelling at least $50,000 to have a meaningful impact, and even that would leave millions with existing debt.

The ACLU wrote last year:

The Center for Responsible Learning argues that the federal government should improve repayment by: (1) clearing the books of bad debts, such as debts that have been in repayment for longer than 15 years; (2) restoring limitations on collections and making student debt dischargeable in bankruptcy; and (3) making repayment truly affordable and budget-conscious through a new income-driven repayment plan open to all borrowers.

Will Biden Cancel All Student Loan Debt?

A lot of people are under the impression that Biden’s $10,000 forgiveness is him reneging on his campaign promise to forgive all student debt. But did he actually promise that? Well, kinda.

$10,000 has always been Biden’s plan. He said this in town halls and on Twitter during his campaign. He also included it in a piece published on Medium in April of 2020, titled “Joe Biden Outlines New Steps to Ease Economic Burden on Working People.” Calls since then demanding Biden cancel all debt have been met with some smug, chastising headlines from economic outlets like “No, Biden Didn’t Promise To Cancel Your Student Loans” (thanks, Forbes) and “Why Hasn’t Joe Biden Forgiven All Your Student Loan Debt? Short Answer: He Never Promised To” (from money.com).

So while Biden was consistent with his promise to relieve $10,000 of debt (as borrowed from a plan proposed by Elizabeth Warren, obviously) there are two points worth noting that people absolutely have a right to push him on.

First, Biden’s promise wasn’t just for forgiveness of $10,000. He promised immediate forgiveness—like, day one forgiveness. Here we are, closing in on 600 days later and he’s just now finally getting around to it. People are justified in being upset about that, especially considering Point #2.

Those chastising headlines are actually wrong. Biden did promise to forgive all debt, at least once, in that Medium piece. There, he wrote that in addition to his $10,000 plan, he proposed cancelling all undergraduate debt for people making less than $125,000. The caveat is that he explicitly said this would happen “with appropriate phase-outs to avoid a cliff.”

So Biden was never going to cancel student debt all at once, and $10,000 was always going to be the first step toward full cancellation. Which is why it’s especially frustrating that step one took this long when we were repeatedly told it would be immediate.

How to sign up for student loan forgiveness

So what happens now? Biden’s plan is basically guaranteed to face legal challenges from angry Republicans but if it stands, and in the meantime, the Education Department will be launching an application “in the coming weeks.” You can sign up to get alerts at the agency’s subscription page here.

Edit: This article originally referred to Biden’s plan as an executive order when it appears to simply be a “plan.” I guess we’ll all find out the difference together!

(image: Alex Wong/Getty Images)

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Vivian Kane

Vivian Kane (she/her) is the Senior News Editor at The Mary Sue, where she's been writing about politics and entertainment (and all the ways in which the two overlap) since the dark days of late 2016. Born in San Francisco and radicalized in Los Angeles, she now lives in Kansas City, Missouri, where she gets to put her MFA to use covering the local theatre scene. She is the co-owner of The Pitch, Kansas City’s alt news and culture magazine, alongside her husband, Brock Wilbur, with whom she also shares many cats.

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