In a decisive move on Monday, the Education Department announced the cancellation of loans for 150,000 borrowers by utilizing programs that were already in place before Biden’s administration. His team has expanded these existing programs and fully leveraged their potential, continuing loan cancellation efforts despite the Supreme Court’s rejection of Biden’s new forgiveness plan.
“My Administration has taken historic action to reduce the burden of student debt, hold bad actors accountable, and fight on behalf of students across the country,” Biden declared in a statement.
Overall, the administration reports that it has written off a staggering $183.6 billion in student loans. However, this wave of cancellations may come to a halt when President-elect Donald Trump assumes office. Trump has yet to clarify his position on student loans but has previously referred to the idea of cancellation as “vile” and “illegal.” Many Republicans have consistently opposed Biden’s plans, arguing that the financial burden ultimately falls on taxpayers who either did not attend college or have already repaid their loans.
The recent wave of relief largely stems from a program called borrower defense, which allows students to have their loans forgiven if they were misled by their educational institutions. Although established in 1994, this program saw limited use until a series of scandals involving for-profit colleges surfaced during the Obama administration.
A smaller portion of the forgiveness was granted through assistance for borrowers with disabilities and via the Public Service Loan Forgiveness (PSLF) program, introduced in 2007, which forgives remaining debt for borrowers working in government or nonprofit roles after making 10 years of qualified payments.
Most of the borrower defense cancellations issued on Monday affected students who attended several now-defunct colleges operated by the Center for Excellence in Higher Education, such as CollegeAmerica, Stevens-Henager College, and Independence University. The cancellations stem from past investigations that found these institutions misrepresented their employment prospects and private loan terms to students.
Before Biden’s term, advocates criticized the complicated rules surrounding these relief programs, which made obtaining forgiveness especially challenging for borrowers. The Biden administration made regulatory changes to simplify these rules, enhancing eligibility without requiring congressional approval.
For instance, prior to Biden’s presidency, only 7,000 borrowers had experienced loan cancellation through PSLF. Widespread confusion regarding eligibility and mistakes made by loan servicers led to an overwhelming 99% rejection rate for applicants.
Many borrowers submitted years of payments only to discover they were enrolled in ineligible repayment plans. Additionally, numerous borrowers were incorrectly placed into forbearance by loan servicers, meaning those periods did not contribute toward the 10-year payment requirement.
The Biden administration initially relaxed eligibility criteria during the pandemic and then made these adjustments more permanent in 2023, resulting in over 1 million public service workers having their loan balances completely erased under the PSLF program.
These regulatory changes were designed to accompany Biden’s flagship debt relief initiative, which aimed to provide up to $20,000 in forgiveness for more than 40 million individuals. However, after the Supreme Court blocked this initiative, the administration redirected its efforts to maximize relief through existing programs.
As announcements of loan cancellations became more frequent, conservative lawmakers accused Biden of overextending his authority. While Republican-led states resisted Biden’s later efforts for mass forgiveness, smaller groups of relief continued without facing significant legal opposition.
With Republicans assuming control of both the House and Senate, along with the presidency, the potential for undoing Biden’s revisions exists, though it remains uncertain how aggressively the next administration will act to restrict loan cancellation.
During his first term, Trump suggested abolishing PSLF, but this proposal was dismissed by Congress. His second-term plans, noted in a Project 2025 blueprint by the Heritage Foundation, include terminating PSLF and tightening the borrower defense program while making repayment plans less advantageous than current offerings.
Republicans have indicated an intention to prioritize reversing Biden’s modifications. Recently, Representative Virginia Foxx, R-N.C., released a report criticizing Biden’s expansion of the borrower defense program and claimed that he “tried to stretch every possible law” to fulfill campaign commitments.
Foxx stated that when Trump takes office, “the jig will finally be up.”
