'They Can Cancel All of It' Today, Advocates Say as Biden Admin Wipes Out Student Debt for 800,000

The Biden Education Department announced Friday that it will soon begin eliminating the federal student loan debt of more than 800,000 borrowers after implementing fixes to income-driven repayment plans, a move that advocates welcomed while urging the administration to use its authority to provide relief to all borrowers.

In a press release, the Education Department said its changes will cancel $39 billion in federal student loan debt—a tiny fraction of the $1.6 trillion in outstanding federal student loan debt in the United States.

"The forthcoming discharges are a result of fixes implemented by the Biden-Harris administration to ensure all borrowers have an accurate count of the number of monthly payments that qualify toward forgiveness under income-driven repayment (IDR) plans," the agency said. "These fixes are part of the department's commitment to address historical failures in the administration of the federal student loan program in which qualifying payments made under IDR plans that should have moved borrowers closer to forgiveness were not accounted for. Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months."

"Make no mistake—over 804,000 people are receiving relief with this action because of 804,000 failures."

Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center, applauded the change as "a huge victory" for the roughly 804,000 borrowers who "have been trapped in decades of never-ending payments."

"But make no mistake—over 804,000 people are receiving relief with this action because of 804,000 failures—and this is only the tip of the iceberg," said Yu. "Now, our leaders need to finish the job. We look forward to the administration's ongoing efforts to enact further relief efforts and ensure they include defaulted borrowers—those who have truly fallen between the cracks and who have been continually left behind."

After the U.S. Supreme Court struck down its student debt cancellation plan last month, the Biden administration announced what's expected to be a lengthy rulemaking process aimed at wiping out student debt via the Higher Education Act (HEA) of 1965—a broader authority than the 2003 law the Education Department cited for its original plan.

The Debt Collective warned at the time that the administration's slow-walked approach will give right-wing opponents ample time to prepare a legal assault on the new program. Instead, the debtors' union argued, the administration should use its HEA authority to cancel student debt immediately.

The group echoed that message in response to the Education Department's announcement on Friday, which came months before student loan repayments are set to resume.

"The Supreme Court ruled against HEROES authority power—but there are other tools in their toolbox," the group tweeted. "They can cancel all of it. Today."