Joe Biden Could Cancel Student Debt for Everyone Right Now

Earlier this month, the Biden administration automatically discharged student debt for more then 800,000 borrowers. The move shows that, if he wanted to, Joe Biden could cancel debt for everyone else right now. He’s not doing that.

Joe Biden speaking at the White House in Washington, DC, on July 21, 2023. (Yuri Gripas / Abaca / Bloomberg via Getty Images)

Good news: earlier this month, Joe Biden’s Department of Education wiped out a total of $39 billion in federal student debt for more than eight hundred thousand people.

The relief will come to some borrowers whose loan servicers either mistakenly or deliberately miscategorized their loan status or steered them away from more advantageous loan terms to which they were entitled. The department says that millions more borrowers who were similarly affected will receive relief sometime in the next year.

But an ostensibly technical detail throws into question the Biden administration’s avowed commitment to canceling student debt more broadly. As the New York Times writes, affected borrowers “will not have to apply — their debts will be automatically discharged.”

Back in the early days of the administration, anti-student-debt advocates tried for months to get the Biden administration to do the same thing for the president’s promise to remove up to $20,000 of student debt from all borrowers’ ledgers. The Department of Education already knows how much people owe, the argument went; making borrowers fill out an application to get debt erased would not only mean some eligible people wouldn’t receive relief, it also meant that the Right could use the time it took to process and review applications to mount a specious legal challenge.

This was not a particularly radical demand — groups calling for application-free debt relief included important mainstream organizations in the Democratic coalition, like the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the National Association for the Advancement of Colored People (NAACP). But rather than listen, the Biden administration chose to create an application in the fall of 2022, and the worst predictions came true. The Supreme Court struck down the plan in its entirety.

It is true that the Supreme Court’s decision to block Biden’s debt relief plan was especially lacking in legal merit, but it is equally true that given the composition of the court, the ruling came as a surprise to absolutely no one. Biden has consistently sold himself as a consummate Washington insider, savvy and experienced in the dirty business of getting things done. How could he, of all people, claim not to have known what would happen?

So student debtors should be extremely concerned about Biden’s new plan to replace the one struck down by the court. Did the administration learn its lesson? No. While it is now asserting authority to partially cancel student debt under a different law, it has insisted on the same process as before: a period of “public comment” on the proposal followed presumably by another application. All of this gives the Right ample time to prepare another lawsuit, to go before a Supreme Court that has already signaled how it will rule.

Biden previously tried to cancel debt under the umbrella of the HEROES Act, which gives the president the authority to cancel debt because of a national emergency; the administration claimed that the COVID-19 pandemic was such an emergency. The administration is now moving to cancel the debt under the Higher Education Act, which gives the secretary of education the authority to cancel any debt they hold.

Many debt relief advocates had urged Biden to use the Higher Education Act from the get-go, seeing it as the stronger legal rationale for forgiving debt. If the Supreme Court strikes down this attempt — and there is every reason to think it will — it would likely preempt any future administration from automatically discharging student debt under the act, regardless of how unfounded the legal reasoning.

We could theoretically chalk this up to mere incompetence if it weren’t for the story of the eight hundred thousand. The Department of Education has already eliminated student debt for nearly a million people with no application process. It could do the same right now more broadly and is simply choosing not to.

If Biden wanted to cancel student debt, he could do it right now — again, the administration’s own actions suggest even it thinks so. Based on his actions since the Supreme Court ruling, it seems like what Biden really wants is merely to look like he wants to cancel student debt. But the ultimate effect of his actions may be to make sure no one else ever can actually cancel it.