Higher Ed, Not Debt Partners Respond: President Biden Cancels Student Debt, Extends the Payment Pause, and Announces Additional Reforms
On August 24, 2022, President Biden announced broad cancellation for federal student loan borrowers, in addition to an extension of the federal student loan payment pause through the end of 2022 and other student loan repayment plan reforms. This sweeping action is celebrated by advocates and borrowers nationwide. President Biden’s cancellation of up to $10,000 for borrowers earning under $125,000 will eliminate balances for roughly 1 in 3 federal student loan borrowers. The announcement included additional relief for Pell Grant recipients, who can receive up to $20,000 of student debt cancellation, which could result in nearly half of federal borrowers seeing their balances zeroed out. An official White House fact sheet also detailed a proposal for a new income-driven repayment plan that would make the student loan system more manageable for current and future borrowers.
Details were also shared in a release from the Department of Education. This news arrives after years of advocacy from borrowers, advocates, and experts, urging policymakers to take decisive action to both broadly cancel student debt and fix the student loan system to prevent future borrowers from landing in another crisis. President Biden also included in his remarks the need for Congress to tackle college costs by passing free community college and other measures. Policymakers on the state and federal level now have the opportunity to take advantage of this moment and protect future students by making college equitably affordable and accessible to all. See below for what else our Higher Ed, Not Debt partner organizations and allies had to say about the announcement. The full statements by organizations are accessible via hyperlinks.
AFSCME President Lee Saunders:
“Today’s historic action puts money back into working people’s pockets and frees thousands of families from crippling debt. It builds on relief already delivered through the Public Service Loan Forgiveness Program, which has already lifted a burden for more than 160,000 public service workers across the country. And it joins lowering prescription drug costs, falling gas prices, and the lowest unemployment in 50 years as yet another way working Americans can benefit when leaders put their needs first.”
AFT President Randi Weingarten:
“Today, millions of Americans can breathe easier knowing that some of the crushing burden of student loan debt has been lifted. Make no mistake—this is a transformative action that will change countless lives. The vast majority of the nation’s 46 million borrowers will see relief, and those struggling to get by will benefit the most. The extra consideration for Pell recipients is especially welcome because it focuses like a laser on people in need.
This administration’s decisions have been a game-changer, but now we need to build on its progress and get the word out. Extending the pause is crucial for borrowers still struggling in the aftermath of COVID-19—and we are asking that the PSLF waiver be extended, too. This is a day for celebration, and tomorrow, with surer footing, we will redouble our efforts to remove this scourge that disproportionately and indiscriminately hurts the most vulnerable.”
Alliance for Youth Action Executive Director Dakota Hall:
“Let’s be clear: Canceling $10,000 is not enough. With student debt at nearly $2 trillion, this will not address the racial wealth gap nor help those in most need of relief. Since President Biden took office, youth activists and organizers throughout the Alliance Network have pressured the Biden Administration and Democrats in Congress to dream as big as our debt and take action, but this dream is too small. Now that Biden proved he has the authority and power to cancel student debt, he can do it again. Canceling $10k of student debt is a dream deferred. Dream bigger, Mr. President. We won’t stop fighting until we win a higher education system that works for all.”
Americans for Financial Reform Senior Policy Associate Emily Hirtle and Consumer Policy Counsel Elyse Hicks:
“The cancellation announced today represents a victory for borrowers and advocates across the country, but still leaves many people with unsustainable amounts of debt. Advocates and borrowers alike are excited for this announcement. We applaud the President and his administration for their continued work on this issue and think this is one step of the many needed to help address the racial wealth gap affecting BIPOC communities.”
Center for American Progress President Patrick Gaspard:
“At last. President Biden’s bold and urgent action on student debt begins to restore a promise we’ve made to generations of Americans that investment in education is their ladder to opportunity.
Devastating college costs, lack of public investment, and predatory institutions have made this a promise unfulfilled for far too many and have harmed the nation’s competitiveness. President Biden’s action tackles alarming and growing disparities in our economy by recognizing that the burden of student loans has not been shared equally. In awarding additional debt cancellation to Pell Grant recipients, the president is taking a monumental step to ensure relief reaches the people who need it most. The extension of the repayment pause is an equally big deal, putting time on the clock to initiate more reforms and add to the millions of borrowers this administration has already helped. These two policies, working hand-in-hand with a new, more generous repayment plan based on income, will deliver a reset on the commitment that a college education can be an affordable path to opportunity and success.
This was a bold step. Now, let’s take the next one and actually confront runaway costs in higher education. We must increase funding for the Pell Grant program, hold colleges accountable for poor outcomes, and make broader reforms to the student loan system.”
Center for Responsible Lending Outreach and Policy Manager Jaylon Herbin:
“We applaud President Biden for being the first sitting president to cancel any amount of student loan debt and for extending the payment pause once more as millions of graduates would have struggled to resume making repayments on their loans. We also commend the president for withstanding political pressure to abandon his campaign promise to cancel $10,000 per borrower.”
Hildreth Institute Founder and President Bob Hildreth:
“We applaud President Biden for keeping his promise and providing up to $20,000 in targeted student debt forgiveness. This will provide immediate relief for borrowers in financial distress and change the trajectory of millions of families across the nation. The Biden Administration has taken important steps acknowledging that a huge component of the student loan crisis is negative amortization – when interest accumulates faster than students can make their payments. The proposed changes to Income-Based Repayment plans will prevent future debt accumulation for millions of low-income borrowers. But, negative amortization is not unique to borrowers on these types of repayment plans. It needs to be addressed across the board. Student loans are just one part of the broken system we use to finance higher education. While today’s actions are an important first step to ease our nation’s student debt burden, fully addressing this crisis is going to take a multi-faceted approach and our work is far from done.”
Hope Center Director of Policy and Advocacy Mark Huelsman:
“The Biden Administration’s decision to cancel a portion of student loan debt builds momentum toward a higher education system and safety net that reflect basic principles of racial and economic justice. For too long, we have treated the crisis of student loan debt as a result of individual choices rather than what it is: the result of policy decisions that have failed to invest in students—including in their basic needs—and protect student loan borrowers. The success of this policy hinges on the Administration doing everything in its power to ensure every eligible family benefits from this announcement.”
The Leadership Conference President and CEO Maya Wiley:
“If education is the path to the American dream of prosperity, student debt is the nightmare that blocks that path. For too many — especially borrowers of color and Black women — student debt makes it hard to get ahead and make ends meet. It can also make it more difficult to get a home mortgage or loans to start a business, both of which reduce wealth-building opportunities and contributions to the economy. That’s why we welcome the Biden administration’s announcement to partially cancel student loan debt. However, the bureaucratic hurdle of income verification will shut out the most marginalized borrowers and blunt the greatest benefits of this policy. This needs to be easy, not hard. In order to benefit the students of color who are most impacted, the administration must raise the canceled amount to maximize relief, create an automatic process that will be easy for students to navigate, and take further action to reform our student loan system to protect former, current, and future students from the harms of our debt-financed system of higher education. This is an important first step, but borrowers should not have to wait any longer for a reprieve.”
MoveOn Executive Director Rahna Epting:
“We thank the Biden administration for taking this historic first step, and we will continue to advocate not only for additional relief but for a fundamental restructuring of our education financing system to ensure that this staggering societal challenge is permanently resolved. Future relief efforts must go further to address the skyrocketing student debt crisis that challenges educational and economic well-being, equity, and mobility for an overwhelming number of working people and their families. Additional loan relief without bureaucratic means testing would be a lifeline to people who have been hit hard by the pandemic and inflation—including seniors on a limited income and, especially, Black and brown Americans, who are disproportionately burdened by student loan debt.”
NAACP President Derrick Johnson:
“President Biden’s announcement today, cancelling up to $20,000 for Americans across many generations, takes us one step closer to the NAACP’s ultimate goal of alleviating the burden of student debt. We’ve got a ways to go, but the NAACP is proud that we were able to push President Biden to exceed $10,000, bringing us closer to $50,000 and beyond. Monthly payments won’t resume until 2023 and will be more manageable for many borrowers. Americans across the country, including millions of HBCU attendees, will benefit from this decision. Our continued focus remains on closing the racial wealth gap and we will continue to press for scaled solutions. We encourage the Biden Administration to grant qualifying borrowers the promised relief quickly, without the red tape and bureaucracy that prevented millions from receiving public service loan forgiveness. The NAACP will continue advocating for equitable relief for the millions of borrowers who are caught in the student debt crisis.”
National Consumer Law Center Student Loan Borrower Assistance Project Director Abby Shafroth:
“Today’s announcement of widespread debt cancellation with additional debt relief for those from low-income households promises transformational relief to tens of millions of low-income families and people of color who have borne the brunt of the nation’s student debt crisis and broken student loan system. For many borrowers, today’s action will mean they can finally be freed from their single largest financial liability and a relentless source of financial stress. It will allow them to imagine a future when they can build savings, a positive net worth, and a better life for themselves and their families instead of being perpetually indebted to the government. Now, the government must deliver by making sure that all eligible borrowers, and particularly the most vulnerable, get the relief they have been promised. Relief should be automatic, without requiring people to jump through hoops, for all Pell Grant recipients, as well as all people the Administration can readily identify as financially distressed and unable to afford their loans, including those in default and those burdened by debt and no degree.”
National Young Farmers Coalition Policy Campaigns Co-Director Vanessa Garcia Polanco:
“At the National Young Farmers Coalition, we support student loan cancellation, not just for young farmers, but for every student borrower—approximately 48 million people in the United States. And yet, we also understand that BIPOC borrowers are bearing the brunt of the student debt crisis. Student debt is a racial equity issue inhibiting BIPOC borrowers from achieving self-determination and stability, in farming or other careers. The President’s executive action on this critical issue is a significant step toward eliminating the burden of student loan debt.”
NEA President Becky Pringle:
“No matter what we look like, where we live, or what’s in our bank accounts, we should be all able to pursue our dreams at an affordable college or university, but that should not preclude us from being able to make ends meet and provide for our families,” Pringle said. “America’s educators thank President Biden for keeping his campaign promise and taking this bold, life-changing action on behalf of the 48 million student borrowers in America. The additional relief for Pell Grant recipients ensures equity, and that the borrowers with the greatest need are not left behind. This will have a positive impact on America’s educators and the students they serve. This is an encouraging step toward achieving the goal of broad student loan cancelation of at least $50,000 per borrower without means testing. We look forward to working with the White House and borrowers to make broader debt cancelation a reality, and extending the waiver that has made Public Service Loan Forgiveness available to millions of educators and other public service workers.”
Roosevelt Institute Managing Director of policy and research Suzanne Kahn:
“Addressing the student debt crisis is just the beginning. To prevent another generation of students from being forced to take on unsustainable amounts of debt, instituting free public higher education must be a priority.”
Student Borrower Protection Center Executive Director Mike Pierce:
“With the stroke of a pen, President Biden has kept his promise to voters and stepped in after decades of inaction, freeing millions from a long-broken, predatory and abusive student loan system. The Biden-Harris Administration has also made major strides in its effort to overhaul the student loan system itself, delivering billions of dollars in additional debt relief to public service workers, low-income people, people with disabilities, and people defrauded by predatory colleges.
For decades, our government has made big promises to people with student debt but repeatedly failed to deliver. This time must be different. President Biden must ensure no one who now has a right to have their debt wiped away will be forced to pay a student loan bill in January. This means that the student loan system must remain shut off until the President keeps his promise to every single American with student debt.
This progress is historic, but also just a start. Debt-free higher education remains out of reach for most people. On our current course, tens of millions of families will continue to struggle under the weight of student debt for decades to come. We applaud today’s action but we also recognize that we cannot rest until every American can climb the economic ladder free from the extraordinary burden of student debt.”
Student Debt Crisis Center President Natalia Abrams and Executive Director Cody Hounanian:
“Today’s announcement marks a historic moment and critical first step in the long fight to end the student debt crisis. Broad-based student debt cancellation will free millions of Americans to invest in their futures, support their families, and contribute to their communities and the economy. While this announcement is a major win for many, it is important to stress that $10,000 will leave many others still crushed by debt and important details will determine who has access to much-needed relief. We will continue to fight to support families with large debts, to further address racial equity issues, and to end the student debt crisis once and for all. SDCC, and this movement, would not be here without the support of two-million people. Together we are celebrating this win and preparing for more work ahead.
We applaud the President for taking a critical first step in the right direction. At the same time, we believe it is important to recognize that millions of everyday people, hundreds of organizations, and dozens of allies in Congress worked tirelessly to push our movement this far. Today’s student debt cancellation announcement is the direct result of grassroots advocacy by hardworking people.”
SEIU President Mary Kay Henry:
“The Biden Administration should be applauded for acknowledging that working families are still struggling to recover from both the COVID-19 pandemic and economic downturn, and actively listening to the voices of SEIU members calling for relief. This announcement signals that our nation is taking another significant step towards alleviating the massive burden of student loan debt faced by millions of Americans. For far too many working families and people, the heavy burden of student loan debt has caused loan defaults, delayed marriages, and for some even the start of families; and made it impossible to save for retirement, college funds, or even emergency expenses. SEIU’s 2 million members, including nearly 400,000 educators, graduate student employees, campus professionals, and school support staff, urge the President and Congress to use all of their tools to enact more robust student loan forgiveness so that more people in our country will have the opportunity to thrive and pursue their version of the American Dream.”
TICAS President Sameer Gadkree:
“Canceling billions of dollars of student loan debt for millions of student loan borrowers is an overdue acknowledgement that our higher education system relies far too heavily on students taking on debt, and that existing repayment protections have been too difficult to access and navigate. Today’s actions on student debt are significant steps toward addressing unsustainable student debt burdens for millions of existing borrowers. But systemic reforms are required to make college accessible and affordable for all students, and to stop this debt from continuing to grow.
Effective implementation in the coming months will be critical to provide the greatest relief to the borrowers most in need. Together with the Fresh Start program, today’s actions will help protect borrowers from a punitive student loan default system. Still, students continue to desperately need a reformed higher education system that does not require taking on significant debt in the first place. Federal policymakers should now take the opportunity to enact reforms that break the cycle of unsustainable student debt that has deepened racial and economic inequities in access to college and in our society.
TICAS urges policymakers to create a path to debt-free college at the federal level; increase need-based student grant aid at the federal and state levels to reduce the need for students to take on debt; implement and protect rigorous protections for student borrowers against colleges that saddle them with large debt without delivering corresponding earnings gains; strengthen income-driven repayment plans, and reform the punitive consequences for students who face years of hardship in servicing their debt. That work is more essential than ever.”
UnidosUS President and CEO Janet Murguía:
“This is a momentous development for those impacted by student debt, including millions of Latino and Latina borrowers,” said UnidosUS President and CEO Janet Murguía. “We applaud President Biden’s action which recognizes and addresses the widespread impact of excessive student debt on Americans’ financial well-being and on the economy. And this executive order will be a game changer for our community as Hispanics have disproportionately experienced financial harm from the burden of student debt. The federal student loan system plays a significant role in disproportionately harming the financial futures for non-completers, women, and borrowers of color,” continued Murguía. “Providing debt relief at this unique moment to those who need it most will result in more Latinos reaping the economic benefits of a college degree, including the ability to build wealth through homeownership. UnidosUS has long advocated for student debt relief and we look forward to working with the Biden Administration to ensure that this much needed and long overdue relief reaches everyone who needs it.”
Young Invincibles Executive Director Kristin McGuire:
“The Biden Administration’s decision will make real strides toward securing the economic opportunity of higher education for young people who have been crushed by the weight of the student debt crisis. While we have consistently asked for larger amounts of cancellation, we also recognize that this action will make a tangible difference in the lives of millions. By some estimates, this will wipe out the full loan balance of 20 million borrowers – that is a major impact.
While this announcement is huge, the inclusion of means-testing measures to cap cancellation for higher incomes may also have the effect of limiting its effectiveness. We call on the Department of Education to lower the administrative burdens on borrowers to make sure this reaches everyone who is eligible. Young Invincibles is also committed to helping borrowers seize this opportunity for relief.
This move to cancel student debt is a major win for borrowers and will provide immediate relief for millions, but we know it is only a temporary measure. We must now fix our broken higher education system to prevent such a crisis from developing again. It’s time to make debt-free college accessible for all who need it. It’s time to lower interest rates to stop turning a profit on the backs of students. And it’s long past time that states and the federal government invest in higher education as the invaluable resource it is.”
Posted on 25 August 2022