With only weeks remaining before President-elect Donald Trump takes office, the Biden administration is pushing ahead with efforts to provide significant student loan forgiveness to millions of Americans.
The U.S. Department of Education has submitted its revised “Plan B” for student loan cancellation to the Office of Management and Budget (OMB) for final review. According to higher education expert Mark Kantrowitz, the OMB review is the final step before the policy is published in the Federal Register. Once published, the Education Department will be able to begin reducing or eliminating loans for eligible borrowers.
President Joe Biden’s revised student loan relief plan came after the Supreme Court blocked his first student loan forgiveness program in June 2023. The new policy targets several groups of borrowers, including those who have been repaying their loans for decades or those who attended schools that defrauded them.
“The Biden administration continues to push for student debt relief in the final days of his presidency,” Kantrowitz said.
In addition to this plan, the Education Department is also working on a second rule under OMB review that could provide loan cancellation for borrowers facing ongoing financial hardship. This measure aims to assist borrowers who struggle with persistent financial burdens that make repaying student loans difficult and who do not fully benefit from existing aid options.
Biden has already forgiven more student debt than any other president, benefiting nearly 5 million people. However, his efforts have faced significant roadblocks, with legal challenges from Republican-led groups halting his attempts to offer broad-scale relief. Consumer advocates predict that new lawsuits will likely be filed against Biden’s latest forgiveness efforts as soon as they are published in the Federal Register.
Despite the hurdles, consumer advocates and lawmakers are urging Biden to push forward with his plans to provide relief before the Trump administration takes over. Trump and Vice President-elect JD Vance have been vocal critics of student loan forgiveness, and public opinion on the issue is split. A national poll from May 2024 revealed that only 15% of Republicans consider student loan forgiveness important, while 58% of Democrats prioritize it.
“Time is running out, and what Biden doesn’t do in the next four weeks will mean tens of millions of working people will face financial struggles for the next four years,” said Braxton Brewington, spokesperson for the Debt Collective, a union of debtors.
On December 4, dozens of lawmakers, including Sen. Bernie Sanders (I-Vt.) and Sen. Ed Markey (D-Mass.), sent a letter to Education Secretary Miguel Cardona, urging the Department of Education to expedite the forgiveness process for borrowers who were defrauded by their colleges. The lawmakers specifically asked the Education Department to address the pending applications of an estimated 400,000 borrowers who may be eligible for debt relief under the borrower defense to repayment program, which applies to those who were deceived by their schools or whose institutions closed unexpectedly.
The letter criticized the previous Trump administration for allowing these applications to go unprocessed for years, often denying relief to deserving borrowers.