Student Loan Debt Relief: Is Forgiveness Really Divine?
Jim Matchefts
July 15, 2024
On the presidential campaign trail in 2020, Joe Biden promised that, if elected, he would implement a program to forgive federal student loan debt for millions of Americans. As the COVID-19 pandemic was winding down, President Biden made good on that promise. On August 24, 2022, Secretary of Education Miguel Cardona announced a plan to forgive up to $20,000 in federal student loan debt for borrowers earning less than $125,000 per year ($250,000 for married couples).
The Biden administration estimated the plan would cancel approximately $430 billion in student loan debt and provide relief for up to 43 million borrowers, including cancelling the full remaining balances for about 20 million borrowers. The Department of Education estimated that the plan would cost an average of $30 billion per year over the next decade.
While praised by consumer advocacy groups and others, the plan also faced heavy criticism, particularly from congressional Republicans. Critics argued that the plan was unfair to those who never attended college and to those who had paid off their loans. Others blamed the administration for doing nothing to address the soaring cost of college, arguing that those costs were the root cause of the student loan debt crisis.
