During the 2020 Presidential election, Joe Biden offered a slew of promises to voters if they would only vote for him. Among the promises, Biden claimed to be the unifier the United States needed. Another key promise he made to the American people was to finally address the overwhelming school debt placed on students for wanting nothing more than to get a better education. While Biden made such claims, it took him almost two years to finally make a statement. Although he moved to alleviate some of the burdens of student loans, his goal fell incredibly short when compared to his initial statement. In August, Biden stated that he would forgive $10,000 of student debt for each borrower. Not the best when some students tip over $100,000 in debt, but it now seems that the Biden administration made a slight change while most weren’t looking.
On Thursday, without letting many Democrats know, the Biden administration changed the stipulation for those who might qualify for the student debt cancellation program. According to the Department of Education, individuals who have a Federal Family Education Loan (FFEL) do not qualify for debt relief due to their loans being owned by private banks. An FFEL loan is guaranteed by the government, but the debt is controlled by the banks.
Looking at the federal data, a staggering 4 million people have FFEL loans. Yet, the Department of Education wrote on their website, “As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.”
As mentioned above, many Democrats had no idea about the change. Representative Yvette Clarke admitted, “I think that we need to revisit that because of the expectations of those 4 million people was that they will be eligible, that they will be receiving some relief. And clearly, it’s a struggle in this economy for students. It’s been a struggle all along, but to have your hopes dashed in that manner due to a revision, I think it needs to be revisited.”
Another Democratic Congressman, Ro Khanna, added, “I have to look more into the details, but I think we should stick with what the president committed to initially. But I certainly don’t think we should be going backward in any way. That would be a big mistake to take away hope from young people who are counting on this forgiveness.”
Even top Democrat Elizabeth Warren was out of the loop. When asked by a reporter, the Democrat said, “I don’t know what you’re talking about, so I can’t comment on it.”
Many critics of the debt forgiveness plan often caution about the repercussions eliminating such debt could have on inflation. The Congressional Budget Office noted the entire plan will cost around $400 billion.