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GreekReporter.com Greek News Education Joe Biden Cancels Nearly $3 Billion Worth of Student Debt

Joe Biden Cancels Nearly $3 Billion Worth of Student Debt

Joe Biden Education
Joe Biden Speaking at the 2020 Iowa State Education Association Legislative Conference. Photo: Gage Skidmore, CC BY-SA 2.0/Wikimedia Commons

Joe Biden has cancelled almost $3 billion worth of student loans since his inauguration in January of 2021. Biden has moved forward with his campaign promise to cancel student loans in increments, and has already canceled a total of $2.8 billion in debt — with more plans forthcoming.

Biden started his rollout of cancellations shortly after taking office, nixing 72,000 loans that amounted to $1 billion altogether just this March.

Before Biden took action on student loans, there was already a law in place that canceled the student debt of those whose institutions had closed or committed fraud.

This method resulted in a partial cancellation of debt for students, but the President’s move in March sought to completely cancel the debt of those affected by this incomplete debt forgiveness.

This form of cancellation was initially introduced in 2015 under the Obama Administration as a provision in the Higher Education Act.

Known as the “borrower defense to repayment,” the provision was meant to “allow borrowers to seek loan forgiveness if a college or university misled them, or engaged in other misconduct in violation of certain state laws,” according to the United State’s Department of Education’s Federal Student Aid division.

The debate over taxpayer money and student loans

The provision was rewritten under the Trump Administration by former U.S. Secretary of Education Betsy DeVos, in order to shift the financial burden of loan repayment away from taxpayers, as the loan forgiveness was federally funded and thus sourced from taxpayer money.

The question as to whether or not taxpayer money should be used to repay student loans is central to the debate on federal loan cancellation.

DeVos made loan forgiveness through this route more complex for the students who sought it, introducing an application where students had to prove harm by the institution more diligently.

It was DeVos’ position that the transference of financial responsibility onto taxpayers was unfair, while others argue that the American higher education system is predatory and traps people into huge amounts of debt at a young age, and that life without an advanced degree is increasingly not an option.

While student loans are a major issue in America, they are also a source of anxiety for Greek students who have studied overseas in England. English universities recently blocked students from the EU from taking out student loans.

Biden’s path for student debt cancellation since March

Biden started his path to loan forgiveness with those partially affected by the amended borrower defense repayment, or those who had received degrees from schools that closed or committed fraud.

Just a few weeks later he cancelled $1.3 billion in loans for 41,000 borrowers with total and permanent disability, amounting to $2.3 billion in loans overall.

This Thursday, he cancelled $500 million more in student loans, again under the borrower defense to student loan repayment rule, with the current total of loans cancelled amounting to $2.8 billion.

Biden has clearly shown follow through on his promise for loan cancellation, but the exact ways in which cancellation will progress is still unclear.

Loan forgiveness may not be entirely universal, meaning it may not apply to any and all student loans taken out by individuals.

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