Mass Student Loan Forgiveness Is Already Happening
While progressive Democrats in Congress have yet to pass a universal student loan forgiveness bill, the Department of Education has nevertheless forgiven billions of dollars in federal student loan debt since Joe Biden became president. And even without new statutory authority, the federal government is slated to forgive increasingly more student loan debt in the future, thanks to the Biden administration’s expansive interpretation of the Education Department’s existing authorities, as well as a law signed by George W. Bush way back in 2007 that mandates loan forgiveness for certain borrowers.
Let’s start with the federal student loan debt forgiveness for low-income and disabled borrowers, which the Department of Education says has erased “$9.5 billion, affecting over 563,000 borrowers,” since January 1, 2021. That sum breaks down roughly as follows:
- $1.1 billion in federal student loan debt forgiveness for 115,000 borrowers under a policy called the “extended closed school discharge.” This action benefits former attendees of the now-shuttered for-profit college ITT Technical Institute who “did not complete their degree or credential and left ITT on or after March 31, 2008.”
- $1.5 billion in student loan debt forgiveness for 92,000 borrowers under “borrower defense to repayment,” which allows for the discharge of federal loans if borrowers can provide evidence their school “misled” them about their employment prospects or the transferability of college credits, or if it mischaracterized loans as grants, or if the school “engaged in other misconduct in violation of certain state laws.”
- $7.1 billion in “total and permanent disability discharges” for borrowers who are classified as disabled by the Social Security Administration. According to the Education Department’s website, “this includes $5.8 billion in automatic student loan discharges to 323,000 borrowers and reinstating $1.3 billion in loan discharges for another 41,000 borrowers.”
Yes, that looks like $9.7 billion. But there is likely some overlap between the groups.
There is also an interesting wrinkle to the disability discharge announcement. The Education Department press release says that 98 percent of the 41,000 borrowers who are having their loan discharge reinstated initially lost their discharge because they “did not submit the requested documentation, not because their earnings were too high.” To prevent their discharges from being revoked in the future, “the Department will indefinitely stop sending automatic requests for earnings information even after the national emergency ends. This continues a practice that the Department announced in March 2021 for the duration of the national emergency. Next, the Department will propose eliminating the [3-year] monitoring period entirely in the upcoming negotiated rulemaking that will begin in October.”
The above actions can be traced to the Biden administration’s interpretation of a section of the Higher Education Act of 1965 that authorizes the secretary of education to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” The Education Department under President Donald Trump took a far more limited view of that authority, though it did use th
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