One that is near to me is their efforts to help deal with the Student Debt crisis. While we're all aware that the Student Loan Relief under the Higher Education Relief Opportunities For Students Act (HEROS) act was, unfortunately and horrifically, struck down by the Conservative-leaning SCOTUS, the Biden Administration has still done a lot for student borrowers.
To start, since 2021, the Biden Administration has discharged approximately $15 billion dollars in student loans for student who were defrauded by their schools.
Borrower Defense Updates
These schools lied to prospective students about their educational programs, their employment rates out of college, accreditation, and more. These schools were found by the FTC, the Supreme Court, and the DoE to have knowingly, purposefully, and maliciously mislead students into taking out loans to go to these schools. This was after the Trump Administration attempted to halt these borrower relief steps, showing that the Trump administration put for-profit schools above their students.
Student-loan forgiveness has halted under Trump
Supreme Court greenlights student loan forgiveness for defrauded borrowers
For those that think that this is some sort of overreach, that those schools treated unfairly by the government, I ask you this - If you were buying something, and the seller lied to you about the product, would that be a fair trade? Why is this any different? A college education is a product, we pay money for it, and we pay based off of information the school provides us. If the school is lying about core facts of it's program, why is that ok?
Secondly, ensuring that people who qualified for Loan Forgiveness through their Income-Driven Repayment plans (IDR) were able to get the forgiveness that they legally deserved, and that the government legally agreed to provide when those borrowers first signed their loans.
For those unaware, there are a few different repayment plants that student borrowers can end up on once they've entered repayment on their federal student loans. By default, you enter the Standard Repayment Plan - Fixed payments across a 10-year timespan to bring the balance to 0 on the 120th payment. This works for many people, but for those with very large loan amounts and smaller incomes, the payments can be impossible.
The Income-Driven Repayment plans change the repayment schedule to be based off of the income of the borrower, ensuring that the payments will be possible for them. There's several different repayment plans, including the Public Service Loan Forgiveness plan (PSLF), which is for those who choose to work in a public service position or for a non-profit organization for a continuous 10 year period. In order to prevent someone from being stuck in repayment for the rest of their life, the IDR plans have a cap - After 20 to 25 years (10 in the case of PSLF) of qualifying monthly payments, a borrower will have the remaining principal and interest forgiven. This was something that was legally guaranteed to borrowers by the government when they took out their loans. They do not get it for free, they get it after hundreds of consecutive, unmissed payments over the span of at least a full decade.
Under the Trump administration, under the leadership of Betsy DeVos, the Department of Education refused to provide those IDR borrowers with the forgiveness they were legally entitled to. Their appeals and requests for forgiveness were left ignored and forgotten, forcing them to continue to make payments. Payments for a loan that they had met their obligations for. For forgiveness they were promised.
DeVos sued over student loan forgiveness program that denies 99 percent of applicants
The Public Service Loan Forgiveness program, which was passed by Congress in 2007, was designed to allow student loan borrowers who work in public service jobs to have their loans discharged after they make 10 years of payments. But relatively few borrowers have been able to obtain the benefit in recent years, as the Education Department has rejected roughly 99 percent of applications. That’s left tens of thousands of frustrated borrowers with student loans they thought would be forgiven after they worked a decade on the job.
Biden brought forth the forgiveness they were legally entitled to, fulfilling the promise the govement made to them, fulfilling the conditions of the loan contract those borrowers signed.
Biden administration unveils $39B of student debt relief as part of income-driven repayment fix
Biden touts efforts to ease student debt, including $9B more in loan forgiveness]Biden touts efforts to ease student debt, including $9B more in loan forgiveness
For those that will argue that this forgiveness was unwarranted, that it was unfair, that it was overreach, I ask you this - If you sign a contract, are both parties not bound to it? The government agreed to forgive these loans once specific conditions were met in the contracts that borrowers signed. The borrowers paid their money, the fulfilled their end of the contract - Surely the government must fulfill their end as well?
Finally, the Biden Administration took a major step into helping the most financially vulnerable borrowers by creating a plan to get rid of the risk of negative amortization through the creation of the
Saving on a Valuable Education (SAVE) Plan.
Negative amortization is when, due to the minimum loan payment being below the rate at which interest is added, the balance of the loan continues to increase. This was an unfortunate corner-case in the Income-Driven Repayment plans. For those with large enough balances and smaller incomes, even if they made their payments on time, every time, the loan would continue to balloon and balloon, putting their credit into a worse and worse state due to the outstanding balance. And if they had a financial shock, and could no longer afford make those payments, they risked going into delinquency or default, which could end up with them having to pay the full amount of the now-monstrously huge loan (acceleration).
The Biden Administration created a new Income Driven Repayment, the SAVE plan, that ensures that any borrower on the plan no longer faces the threat of negative amortization - For borrowers with a monthly payment that is not enough to cover the monthly accrued interest, the government will waive the remaining interest that would accrue that month, preventing the loan from getting larger while the borrower makes their required payments.
For those that believe this is a unnecessary handout - The borrowers who benefit from SAVE are those who would already be utilizing the IDR plans regardless. The government had already legally promised borrowers that they could access and reach forgiveness on the IDR plans, that was part of the contract that borrowers signed with the government when they first took out the loans. Without the SAVE plan, they'd still be getting the forgiveness at the end of the time period. If anything, the lack of an ever-ballooning debt makes it more likely than before that these borrowers will pay off their loans in full before the forgiveness kicks in. What's the point of having them threatened by a increasing weight that threatens to crush them if they ever encounter a hardship, despite diligently making payments? Inflicting grief shouldn't the be point of student loans.
There's a lot of victories that the Biden Administration has. And while I am immensely disappointed for borrowers that the Student Loan Relief plan didn't go through due to some sketchy logic from Republican SCOTUS judges, his administration is still fighting for student borrowers. And that's a good thing.
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