In what appears to be another desperate attempt at garnering public favor, President Biden’s administration announces a new, questionable initiative for student loan forgiveness targeting those facing financial hardships. With a series of regulatory hurdles to cross and a shaky future, the rule aims to address those struggling with medical expenses, child care issues and various other economic challenges. Up until now, Biden’s previous endeavours at student loan cancellation have not seen much success, thanks to the continuous legal hurdles presented by Republican states. His initial proposal found itself dismissed by the Supreme Court, while a Missouri federal judge temporarily derailed his second attempt. Having stumbled twice before, one wonders if this third attempt will survive the gauntlet before Biden vacates the Presidential office.
While seeming unconstitutional by critics who deem it prejudiced and unfair, the proposed concept would, in theory, allow the Education Department to initiate cancellation of the loans for certain borrowers. This, of course, is contingent on the department’s prediction that these borrowers have an 80% likelihood of defaulting on their loans within a span of two years. The formulations, however, remain vague on how long and complex this review process may be for the financially struggling borrowers. The skepticism of the department’s ability to accurately forecast financial struggles also emerges as a valid concern.
According to the Education Department’s most optimistic calculations, around 8 million Americans stand the chance to benefit from this loan cancellation. Yet, the plan that is offering relief to those with little hope of ever clearing their school debts is also the same plan that showcases the administration’s shortcomings in the area of education reform. Despite claims of wanting the best for the American people, the mishandling of the student loan system under the Biden administration has only further exacerbated the hardships borrowers face on a nationwide scale.
Education Secretary Miguel Cardona conveyed his sentiments regarding the issue, stating the ‘broken’ student loan system to be an unjust barrier for struggling students. No wonder, the administration has been targeting the most vulnerable population, including those crushed under the weight of medical bills, high childcare expenses, or those reeling from the financial ramifications of natural disasters. But upon closer inspection, it is clear that this altruistic narrative has underlying motivations. It seeks to garner public favor for an administration that has failed time and again to deliver on its promises.
This grandstanding by the administration was quickly dismissed by Virginia Foxx, a North Carolina Republican and the chair of the House Education and the Workforce Committee. Describing it as a ‘sham plan,’ Foxx highlighted how this feeble progress in the college cost reform was intended for electoral gains. This comes as no surprise given the administration’s previous acts of stringing together lofty promises that never come to fruition.
The controversial proposal includes measures that allow the department to consider a range of variables when determining a borrower’s likelihood of defaulting on their loans. Criteria like household income, age, public benefits, and the overall debts, not just the student loans, are in focus. But the ambiguity of what the department considers as ‘indicators of hardship’ casts a dubious light on Biden’s latest attempt at loan cancellation. In essence, the administration has turned to bureaucratic vagueness to cover up the inadequacies of their plan.
The proposal throws around striking claims without providing any concrete evidence or methodology. For example, a loan is supposedly defaulted when no payment has been made for about nine months. However, with an average of 1 million borrowers defaulting every year, it raises questions about the viability of the administration’s response. The Education Secretary contends that chasing after defaulted loans costs taxpayers – an admission that paints the administration’s lack of foresight in concerning light.
Biden’s latest attempt at ‘forgiveness’ is yet to undergo a 30-day public comment period before it becomes official. Regardless, the target of implementing the rule by 2025 appears a distant dream that keeps stakeholders on tenterhooks. This proposal comes at a strategic time, less than two weeks before President Biden’s contest for another term at White House against Vice President Kamala Harris.
Vice President Kamala Harris, however, has not walked us through how she intends to address the problem of student debt cancellation in the event of her win. Perhaps it’s because her time and energy are better spent on viable plans unlike the poorly thought-out initiatives put forth by her competitor. This view point is also echoed by Republican nominee Donald Trump, who labeled Biden’s proposals as both illicit and biased. As the Election Day approaches, the White House race appears balanced with no clear frontrunner.
The recent proposal by Biden seems a hurried one, drafting specialists from the realm of higher education. Advocates have long fought for the integration of hardship provision, highlighting the plight of borrowers who harbor an unavoidable burden of debt. Yet, one must question the administration’s intention behind the late introduction of such provision.
Despite dishing out high claims, the administration’s authority to waive off debt in certain cases under the Higher Education Act appears to be exploited for political gains. While other federal agencies reportedly conduct routine debt-waiving considering ‘good conscience’ and fairness, Biden’s administration has used it as a justification for their ill-conceived attempts at student loan forbearance.
These attempts, including forgiving outstanding sums of interest and catering to those with older loans, may appear benevolent on the surface. However, the reality remains that a Missouri federal judge obstructed this plan owing to a lawful challenge by Republican states. This casts a shadow over Biden’s authority and the administration’s ability to navigate legal challenges, hence further throwing their credibility into question.
As the man who pitched his tent on the promise of transformative student loan cancellation during the Presidential race, Biden’s significant plans have unfortunately hit rough waters due to continued resistance by his Republican adversaries. Last year, for instance, Biden’s audacious plan of granting forgiveness up to $20,000 for innumerous Americans encountered a roadblock when it was challenged by Republican states.
While continuously embattled by legal restraints, the administration has seemingly shifted its focus again towards canceling student loans using the existing schemes. Ironically, these include those for public service workers, people that the administration usually overlooks. The irony doesn’t end there – the provision of hardship, originally part of the second plan, is now separated by the Education Department to arguably provide more time for ‘details’.
One must pause here and question the real reasons and motives behind these frantic last-minute changes. Is this just another political ruse to cast a favorable light on a struggling administration? Are these ploys only in place to fill gaps in their flawed strategies? Only the future will tell if these efforts are genuine or just another means to an end.
Finally, according to this dubious administration, it claims to have canceled $175 billion for approximately 5 million borrowers. The question remains though – Can we rely on these numbers, or is this just another shiny, misleading front presented by the Democratic administration? Despite the claim of details, it seems like the truth is swept under the rug while the spectacle continues.