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How the Biden Administration is changing federal student loan policies without canceling debt

President Joe Biden
Posted at 5:00 AM, Feb 21, 2022

WASHINGTON — The Biden administration announced last week it had canceled more than $400 million in student loans for people who attended for-profit colleges.

The ruling affects 16,000 students who the government says were defrauded by for-profit colleges, including 1,800 former DeVry University students.

While it comes as a relief to thousands of people and their families, it's left some to wonder: If President Joe Biden can cancel debt for those students, can he cancel debt for everyone?


The U.S. has accrued nearly $1.75 trillion worth of student debt nationwide.

In Florida, the average debt for those with loans is around $24,000. In Montana, it's averaging just over $27,000. In Wisconsin, it's over $30,000.

Similar numbers are reported in most states throughout the country.


When Biden ran for office, he pledged to cancel student debt. However, since he has taken office, he has not acted on his own to do it.

Instead, he has encouraged Congress to take action to cancel student debt — a move that has frustrated many in his party.

Senate Majority Leader Chuck Schumer, D-New York, has recently called on the Biden Administration to take more action to cancel student debt.


But that doesn't mean no changes are happening. In fact, some changes have already occurred that are impacting families.

For one, every American with federal student loan debt has enjoyed nearly two years of not having to make the payments — without interest accumulating on those loans.

Since March of 2020, under a program that began under former President Donald Trump, federal payments have been suspended. Biden has extended the pandemic-related policy several times since taking office.

May 1 is when federal student loan payments are set to resume. However, that date may get pushed back again.

Additionally, federal law already allows Americans who work in public service to get their debt forgiven after working a certain number of years.

Before Biden took office, the process was complicated, and many borrowers were denied loan forgiveness over technicalities. A new waiver by the Biden administration has changed some of that, and experts now say 9.3 million Americans are now eligible for student loan forgiveness. That includes teachers, police officers, government employees and even some who work for non-profits. Those who think they may qualify are encouraged to apply — or re-apply.

Finally, a big change has happened recently involving bankruptcies.

Student loans aren't treated the same way as credit cards when someone files for bankruptcy. While it's possible to get the debt discharged, typically, the debt stays with someone after they get a bankruptcy ruling. However, in New Jersey, a federal judge decided to interpret the law differently and canceled more than $100,000 in one man's student debt after he filed for bankruptcy. The Justice Department has decided not to object to that case, a rare move, and the Department is now reviewing bankruptcy policies going forward.


Still, Biden is facing pressure to do more.

The White House has not yet released an internal legal analysis showing whether Biden's attorneys believe he has the authority to cancel debt on his own.

Many members of Congress believe he does and would like to see that analysis released.