Biden-Harris Administration Approves Additional Billions in Student Debt Relief

With the 2024 presidential election on the horizon, the Biden-Harris administration is continuing its student loan debt relief efforts, this time approving nearly $5 billion.Dr. Stella FloresUniversity of Texas at Austin

The relief  comes as a result of the IDR Account Adjustment, a temporary federal initiative enacted by the administration that gives borrowers retroactive progress towards 10- to 25-year repayment terms under income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs.

The adjustments, which has been in the works for a few years now, apply to those currently or formerly on an IDR plan; in the PSLF program; or with William D. Ford Federal Direct Loan (Direct Loan) Program or federally owned Federal Family Education Loan (FFEL) Program loans, the Education Department (ED) stated on a webpage explaining the adjustment effort.

For the purposes of this change, repayment status is what is counted and adjusted for – the type of federal loan or repayment plan the borrower made payments under does not matter. And even some periods of forbearance, deferment, or default will count as progress.

Historically, the IDR and PSLF programs have received criticism for their complexity, lack of clarity, and manipulative practices from loan servicers, leading to borrowers continuing to pay their debts while not receiving forgiveness progress. Spending months in an ineligible payment plan would also not have counted towards progress, according to ED.

The announcement "makes clear that the administration is thinking about debt forgiveness on multiple levels, and pursuing as many strategies as possible to help make sure this economic and moral imperative gets done,” said Randi Weingarten, president of the American Federation of Teachers (AFT).

Last July, the adjustment resulted in the approval of $39 billion in student loan forgiveness to 804,000 borrowers. After a legal challenge that was ultimately dismissed, ED proceeded with the forgiveness effort.

This time around, the IDR Account Adjustment will bring about the approval of $4.9 billion more in debt relief, affecting 73,600 borrowers. “Regulatory improvements” to the PSLF program account for $3.2 billion of the forgiveness to 43,900 people, and the rest comes through “administrative adjustments to IDR payment counts,” according to ED’s announcement of this relief to the “broken student loan system.”

“The nearly $5 billion in additional debt relief announced today will go to teachers, social workers, and other public servants whose service to our communities have earned them Public Service Loan Forgiveness, as well as borrowers qualifying for income-driven repayment forgiveness because their payments are for the first time being accurately accounted for,” said Dr. Miguel A. Cardona, U.S. Secretary of Education.

PSLF beneficiary Dr. Stella Flores, an associate professor of higher education and public policy at the University of Texas, commended ED and the Biden-Harris administration for what she sees as improvements to how these forgiveness plans are being implemented. 

This most recent $4.9 billion brings the total amount of forgiveness that the Biden-Harris administration has approved to $136.6 billion, with more than 3.7 million people affected, according to ED.

Dr. Robert Kelchen, department head of educational leadership and policy studies at the University of Tennessee Knoxville, said that some of the administration’s work to relieve student debt is meant to achieve parity for borrowers, old and new. And student debt relief in the year of a presidential election can be compelling, he said.

“The Biden-Harris administration is trying to do everything they can within their legal authority to reduce student debt,” said Kelchen. “Student debt relief is a potent get-out-the-vote mechanism for Biden and Harris, so they want to keep pushing as much as possible.”

Despite the U.S. Supreme Court’s rejection of its student debt cancellation efforts last June, the administration has sought alternative ways to relieve borrowers of student debt, including through negotiated rulemaking; its Saving on a Valuable Education (SAVE) plan; and early forgiveness via SAVE for smaller borrowers.

Loan forgiveness can help assist those suffering from longstanding wealth disparities, Flores said.

"The history of wealth inequality, especially racial wealth inequality, is that you inherit generational wealth through your parents. Obviously, some families had more opportunities than others, just by the color of their skin or by their gender,” Flores said. “Going to and paying for college, over time, is really about [whether your family has wealth, was privileged, and was white.]

“Loan forgiveness for those who were able to not only succeed academically but took the very large risk of perhaps getting loans to be able to execute an academic plan ... [is] a beautiful thing that the country can do for ... students who were not born into wealth."

Diverse 2024 Emerging Scholar Dr. Jorge Burmicky, an assistant professor of higher education leadership and policy studies at Howard University, cautiously welcomed this most recent development as good news for Black and Brown borrowers, who he noted are disproportionately overrepresented in student debt.

“As we approach this presidential election year, I am not surprised to see these types of announcements given that the Biden-Harris ticket relies heavily on Black and Brown voters who wanted this administration to deliver more on student debt,” Burmicky said. “I’m of course cautious about the news given the obstacles we’ve come across before with the courts, but for now I think this is welcomed news.”