Biden Cuts Student Debt: What You Need To Know

Today, after extensive pressure, President Joe Biden agreed to cancel at least $10,000 in federal student loan debt for those earning less than $125,000 annually. While the amount is less than many debt cancellation advocates called for, and the plan could face legal challenges, the announcement is a step in the right direction. At last count, the total amount of U.S. student loan debt topped $1.75 trillion.

Biden’s proposal will cost $300 billion. By comparison, the forgivable loans provided to business owners from the COVID-19 Paycheck Protection Program cost more than twice that amount.

Biden’s decision to cancel student debt did not come easily. The president has long been a proponent of saddling Americans with debilitating debt, and, as our team uncovered, his Justice Department has made a habit of fighting student debtor victories in federal court. He has still not fulfilled his promise to stop punishing student debtors in bankruptcy court.

To understand how we got to this point, here is the reporting we have done to hold Biden accountable on the matter:

• Biden & Student Debt: A 40-Year Love Affair (Feb. 23, 2021) — “Throughout his career, Biden has had a reputation for being on the side of lenders. Between 2003 and 2008, he took $500,000 from the lending industry. In 2005, he was one of 25 Democrats to sign onto Republican-led bankruptcy reform legislation that removed protections on private student loans. The bill was considered a giveaway to lenders and helped create a $125 billion bubble in private student loan debt. For Biden, that kind of immiseration is not a new cause.”

• Biden Moves To Block Student Debt Victory (Feb 2, 2022) — “Despite increasing pressure to fulfill a campaign promise to forgive student debt, President Joe Biden is now going in the opposite direction: His administration has taken an initial step to try to overturn a key legal victory for borrowers, according to court filings reviewed by The Lever.”

• Biden Withdrawing Student Debt Appeal After Outcry (Feb 4, 2022) — “The Biden administration is abruptly withdrawing its attempt to block a major court ruling that could protect student borrowers, according to a new statement provided to The Lever. The announcement comes 48 hours after The Lever broke the news that the administration had moved to appeal the ruling, which could help the poorest borrowers who are being bankrupted by education debt.”

• Despite Pledge, Biden Still Fighting Student Debtors In Court (Feb. 10, 2022) — “Last week, the Department of Education abruptly stopped trying to overturn a bankruptcy court victory for a struggling student loan borrower after The Lever’s reporting on the case went viral. But there are still dozens of cases where the Biden administration is fighting federal student loan borrowers who are trying to eliminate their debts through bankruptcy, according to court records reviewed by The Lever.

• YOU LOVE TO SEE IT: Biden Faces Mounting Pressure On Student Debt (Feb. 12, 2022) — “At a Friday press conference on student debt cancellation, The Lever asked Senate Majority Leader Chuck Schumer (D-N.Y.) if he supported these organizations’ demand [to drop its cases against student loan borrowers]. ‘Yes, absolutely,’ he said, adding, ‘It’s outrageous that other people get to declare bankruptcy but students can’t,’ referring to the carve-out for student debt in bankruptcy that makes it very challenging for people declaring bankruptcy to have their student loans discharged.”

• VIDEO: How Biden Caved On Student Debt Lawsuits (Feb. 18, 2022) — “Julia Rock discusses how her coverage of the Biden administration’s court battles against federal student loan borrowers was picked up by corporate media and led the Department of Education to drop its legal appeals.”

• Senate Dems Demand Biden Stop Crushing Student Debtors (April 1, 2022) — “Senate Democrats are demanding the Biden administration back off its attempts to overturn court rulings that help student debtors. The new demands were prompted by The Lever’s original series showing the administration has been betraying Biden’s campaign promise to allow borrowers to discharge their student debts through bankruptcy. Instead, the administration has fought debtors in bankruptcy court.”

• CHEAT SHEET: The Truth About Student Debt (April 14, 2022) — “At the end of the day, there is one truth that matters: Biden has the authority to do more than just pause student loan repayment, yet he’s been reluctant to do so, despite the broad appeal and notable benefits of opting for a permanent cancellation and moving toward making public colleges and universities free.”

• The Means-Test Con (May 2, 2022) — “In trial-ballooning the college debt relief proposal, Biden is boosting the media-manufactured fiction that real, universal college debt relief would mostly help rich Ivy League kids — even though data from the Roosevelt Institute conclusively proves that canceling student debt ‘would provide more benefits to those with fewer economic resources and could play a critical role in addressing the racial wealth gap and building the Black middle class.’”