The Fight For Access To Education: The Biden Administration Announces Student Loan Relief

The Fight For Access To Education: The Biden Administration Announces Student Loan Relief

On Wednesday, President Biden announced a sweeping effort to forgive a portion of student loans. NASW has been an instrumental voice nationally in building coalition support and placing constant pressure on the White House to take direct action on student loan debt over the last several years. 

President Biden announced a three-part plan to provide student loan debt relief for borrowers who need it most. The plan includes:

• Cancellation of student loan debt for individuals earning up to $125,000 annually

• An extension of the federal student loan payment pause, and moratorium on interest through December 31, 2022

• A proposal of a new income-based repayment plan that will reduce future monthly payments for lower- and middle-income borrowers.

Individuals who had PELL grants can have up to $20,000 canceled and other student loan borrowers can have up to $10,000 canceled. This historic student loan debt cancellation will assist thousands of social workers and their families, also alleviating the economic strain associated with the burden of student loans, for many more borrowers.

“The decision to cancel $10,000 in student loan debt and $20,000 for Pell Grant recipients will make a real difference for 1.4 million Michiganders that have student loans, putting money back in their pockets,” said Governor Whitmer. “Nearly 700,000 Michiganders will have their debt cut in half or eliminated entirely, lifting a huge burden off their backs. People can use these savings to buy a home, start a business, get married, or start a family. I will work with anyone to keep lowering the cost of higher education and offering more paths for Michiganders to earn a higher education tuition-free, without going into debt in the first place.” 

Although a decision on broad-based cancellation has been long-awaited, the announcement comes after significant prior actions taken by the Biden administration to address the complex student loan debt and higher education financing crises. These actions include implementation of a Public Service Loan Forgiveness (PSLF) waiver of certain eligibility criteria that benefits many social workers, as well as proposed reforms to the troubled PSLF program. NASW has advocated for an extension of the PSLF waiver , which is currently set to expire on Oct. 31, 2022.

This decision will benefit up to 1.4 million Michiganders that have federal student loans. Today 30% of Michiganders with federal student loans, approximately 420,000 people, owe less than $10,000 and this opportunity would forgive all of their debt. Around 50% of Michiganders with federal student debt, approximately 700,000 people, owe less than $20,000, and their debt would be cut in half or forgiven entirely. Nearly 700,000 more Michiganders will receive important loan relief.  

Additionally, the pause on student loan repayment, interest, and collections for all borrowers has been extended through December 31, 2022. 

In tandem with the debt forgiveness, a new rule from the U.S. Department of Education will ensure that borrowers on income-based repayment plans will pay no more than 5% of their discretionary monthly income on student loans, down from 10%. This will cut out of pocket costs by half, saving Michiganders hundreds of dollars a month. 

“NASW-Michigan is grateful and in full support of this historic decision. However, we will continue to advocate for broad student loan cancellation across the board,” states Melina Brann, Director of Policy and Advocacy. “It is a step in the right direction. A few years ago this would be inconceivable and unreachable, yet student debt remains a tremendous burden for many, including thousands of social workers in our state. We are prepared to continue the decades-long fight of creating an equitable path towards higher education.”

Resources

• The Biden-Harris Administration's Student Debt Relief Plan Explained (studentaid.gov)

• Student Borrower Protection Center PSLF Success Story Campaign

• White House Public Service Loan Forgiveness Web Page

• PSLF Help Tool

Related NASW Advocacy

• NASW submits comments in response to Department of Education’s Notice of Public Rule Making regarding Student Assistance General Provisions (Aug. 11, 2022)

• NASW signs onto coalition letter urging President Biden to extend, expand, and coordinate more closely the current Public Service Loan Forgiveness waiver and Income-Driven Repayment Adjustment (7/21/2022)

• NASW, along with its 55 Chapters, signed onto a letter urging President Biden to extend the student loan debt payment pause (6/30/2022)