It might take a semester-long course to explain all of President Joe Biden's student loan plans.
Since the Supreme Court struck down its $400 billion student debt transfer, the Biden White House has been hard at work regrouping and attacking the issue on multiple fronts. So many, in fact, that it can be difficult even for professional loan forgiveness followers to keep up.
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"I find it very hard to track what is happening and how they’re doing it," said Neal McCluskey, director of the Cato Institute’s Center for Educational Freedom. "So I imagine that the average person is unable to follow any of this. I don't know whether that is intentional or not."
Biden announced the headline-grabbing original plan in August 2022, six weeks before the midterm elections. The plan was blocked by a federal judge just days after the election and ultimately struck down by the Supreme Court in June 2023.
Biden administration officials repeatedly pledged that there was no Plan B if the high court overturned the program, yet moved swiftly following the legal setback to announce future moves.
One of the most significant is the Saving on a Valuable Education, or SAVE, plan, which will greatly reduce the amount that most people who take out student loans repay. In fact, most loans would be written off completely after no more than 20 years. Critics of the plan, including Brookings Institution scholar Adam Looney, say it is untargeted and provides the greatest benefit to loanees who find the least career success.
"Want a free ride to college?" Looney wrote in his analysis. "You can have one, but only if you study cosmetology, liberal arts, or drama, preferably at a for-profit school."
But that plan is for future borrowers, not current ones. For that, the Department of Education announced, beginning the week that loan payments restarted following a 3-1/2-year pause, a new series of loan forgiveness initiatives.
The new plan has identified four groups of borrowers who could see their loans partially or fully forgiven: those with loan balances that exceed their original balance, those with loans more than 25 years old, those whose college experience left them with "unreasonable debt loads or provided insufficient earnings," and those eligible for repayment plans but who have not applied for it.
A fifth group, “those who are experiencing financial hardship that the current student loan system does not currently adequately address," could be added later.
“President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” Secretary of Education Miguel Cardona said in a press release. “These draft proposals would build on the historic $127 billion in loan forgiveness the Biden-Harris Administration has already approved for nearly 3.6 million borrowers."
Loans said to be "forgiven" are not truly canceled but are written off as a taxpayer expense and added to the national debt.
The new plan is likely to be much smaller in scale than the original, which would have affected more than 40 million people, a fact that was news even to some of the people helping establish it.
The current forgiveness plan is based on the secretary of education's authority under the Higher Education Act of 1965, rather than the emergency legislation the original plan was based on, meaning it has to go through a lengthy negotiated rulemaking process.
That process is subject to public comment and involves six meetings by a 16-member committee. The committee consists of students and officials from a range of colleges, along with loan servicers, state officials, and advocates including the NAACP.
Committee members first met in October, with some laying out their desires for a vast reworking of the federal student loan system.
“Wiping out interest isn’t adequate,” said Yael Shavit, a committee member representing the Massachusetts attorney general's office. “We need to make sure we’re considering broad relief.”
Administration officials had to step in to clarify what was and was not on the table in negotiations.
"We’re not looking at a broad-based debt cancellation where we are going to wipe off debt in its entirety,” Tamy Abernathy, director of the policy coordination group at the Education Department’s Office of Postsecondary Education, said during the second day of meetings. “That doesn’t mean that, in some cases, there wouldn’t be cancellation.”
Nonetheless, the rulemaking process is being watched closely by advocates of transferring student debt.
"President Biden promised broad student debt cancellation, and this is a chance for him to finally deliver on it," the Student Borrower Protection Center wrote in a newsletter. "As [negotiated rulemaking] continues, we trust that those at the table who hold borrowers’ best interests at heart, will continue to expertly stand up for them and shape a final student debt cancellation rule that helps all struggling borrowers."
The convoluted rulemaking process is open to public comment, something McCluskey took advantage of by speaking ahead of the Nov. 6 committee meeting. His comments focused on the perverse incentive for colleges to raise prices, and the specter of false hope to incoming college students given the administration's fuzzy language around forgiveness.
"The promise of easy forgiveness will incentivize colleges to charge ever-higher sticker prices on the grounds that many students will feel they can accept those prices without having to actually pay them," McCluskey said. "A 2017 survey found that half of students expected at least some of their debt to be forgiven — what is being discussed by this committee could amplify that."
House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) makes a similar complaint — and points to political motivations.
“This is just more of the same garbage being spewed by this administration," Foxx told the Washington Examiner. "It’s a ploy to get votes. And it does nothing to address the underlying issue of rising college costs.”
A final rule will be released early next year, and then will be subject to public comments.
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Despite the intensity of the student loans debate, particularly on the Democratic side, data from the College Board show that the average size of federal loans per student peaked in 2010 and has been falling in the years since as the burden of loan debt started to get more attention.
The data indicate that voters and students are becoming more aware of the trade-offs involved with attending college, and especially of going into debt to do so.