Biden Pardons His Son – Is More Student Debt Forgiveness Next?

With only seven weeks remaining in his presidency, Joe Biden’s choice to pardon his son has led some Americans to request a “pardon” for their student loans. However, the process of forgiving student debt is far from straightforward.

As of June 2024, Americans have accumulated a staggering $1.6 trillion in student loan debt, data from the Pew Research Center shows. This financial burden affects one in four adults under the age of 40, hindering their ability to purchase homes, start families, and save for the future. During his tenure, President Biden implemented several measures to mitigate this issue, yet he encountered numerous obstacles and was only partially successful. His efforts resulted in the cancellation of approximately $166 billion in student loans for about 4.4 million borrowers, as reported by the U.S. Department of Education.

In October, the Department announced that the Biden administration had approved additional debt forgiveness, increasing the total amount of relieved student debt to $175 billion for nearly 5 million borrowers. Despite these achievements, calls for further expansion of this relief to include more people facing financial difficulties continue as Biden’s presidency nears its end in January.

Recently, Democratic Senator Ed Markey of Massachusetts, Senator Dick Durbin of Illinois, and Representative Maxine Waters of California, along with 72 other lawmakers, urged Biden’s Education Secretary in a letter to eliminate debts for students misled by for-profit schools. They criticized the previous administration under Donald Trump for neglecting borrowers’ applications and frequently denying them without offering any relief, emphasizing the urgent need for immediate action from the Department.

At the end of Donald Trump’s presidency, amidst the escalating COVID-19 crisis, then-Education Secretary Betsy DeVos invoked the Heroes Act to pause student loan payments, providing temporary respite during the pandemic. Upon assuming office, Biden extended this pause and sought ways to convert the temporary relief into permanent aid, though not without facing challenges.

Here’s an overview of Biden’s strategies to forgive federal student loans and the difficulties he encountered:

Supreme Court Challenges Biden’s Loan Forgiveness Initiative

In 2023, the Supreme Court rejected claims by Education Secretary Miguel Cardona that the Heroes Act authorized him to cancel $430 billion in student debt. The court’s conservative majority argued that the administration overstepped its bounds by extending comprehensive pandemic-era relief based on a law initially designed to temporarily halt payments following 9/11 and subsequent U.S. military actions. This law was later broadened to include borrowers affected by wars and national emergencies.

The Biden administration contended, with support from dissenting liberal justices, that the law was adaptable and could support extensive debt cancellation. However, Chief Justice John Roberts stated that the Education Secretary’s power to “modify” was intended for minor adjustments, not to overhaul existing provisions.

The case, Biden v. Nebraska, effectively put an end to the administration’s ambitious plans to erase $430 billion in student debt.

Biden’s Alternative Approaches to Student Debt Relief

Following the Supreme Court’s decision, Biden promptly described it as “a mistake” and vowed to continue seeking solutions for debt-burdened students, focusing on those in the lower economic brackets. He then turned to the Higher Education Act of 1965, which allows for debt to be compromised, waived, or released under certain conditions.

While this approach was legally viable, Biden acknowledged that it would be slower than using the Heroes Act. His administration managed to offer targeted relief to specific groups, such as those struggling with small loan balances over a decade and individuals working for government or nonprofit organizations.

Just before the 2024 election, Biden introduced a broad new student debt relief strategy, which proposed rules enabling Secretary Cardona to forgive loans for borrowers likely to default in the next two years under specified conditions. The plan also included provisions for those facing hardships like medical expenses, high child care costs, or economic impacts from natural disasters.

Extent of Student Debt Forgiveness

Here are the figures detailing how much student loan debt has been forgiven:

• As of October, 1,007,940 borrowers have been granted forgiveness, totaling around $73.72 billion, through Public Service Loan Forgiveness discharges and approvals.
• As of May, 1,035,480 borrowers have had about $51.07 billion in loans forgiven under income-driven repayment plans.
• Recent data shows 1,328,000 borrowers have been forgiven roughly $20.03 billion under borrower defense approvals.
• As of August, 571,850 borrowers have had about $16.2 billion forgiven due to Total and Permanent Disability discharges, in cooperation with the Social Security Administration and other programs since July 1, 2023.
• 414,020 borrowers have seen about $5.46 billion in loans forgiven as of May under the SAVE program.

Contributing: Zachary Schermele.