Biden's Student Loan Plan Challenged as Not Enough

President Joe Biden announced a $5 billion plan on Friday that would allow some student loan borrowers to have their debt forgiven, but some are saying that the program is not enough.

The new plan arrives after the president's prior plan to cancel student loan debt was found in violation by the Supreme Court last June. The conservative-led court voted to overturn the Biden administration's student debt cancellation plan after Republican-led states sued the White House over its push to forgive up to $10,000 in debt for borrowers making less than $125,000 a year. Pell Grant recipients, a need-based program of the Department of Education (DOE), could have received up to $20,000 of debt relief in Biden's plan.

In a speech hours after the Court's overturning, Biden promised that he would not "stop fighting to deliver borrowers what they need" and announced new ways his administration hoped to offer debt relief "as fast as we can." The plan included steps taken by Department of Education (DOE) Secretary Miguel Cardona to initiate a rule-making committee intended to propose new regulations for student loan programs.

Under the new $5 billion plan, 74,000 borrowers will see relief, including 44,000 of those who have worked 10 years in public service. Around 30,000 of the student loan holders affected are those who have been repaying their loans for at least 20 years, but were not able to find help through income-based plans.

Altogether, more than 3.7 million Americans have seen their student loan debt erased, which was an early promise Biden made when he first took office.

"From day one of my administration, I vowed to improve the student loan system so that a higher education provides Americans with opportunity and prosperity—not unmanageable burdens of student loan debt," Biden said in a statement Friday. "I won't back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams."

Biden previously said loan holders with less than $12,000 in loans who have been repaying for 10 years will also see their debt canceled, starting in February.

Meanwhile, in a letter penned to Cardona on Thursday, 67 organizations representing students of various backgrounds called on Biden administration to help those experiencing hardship with their student loan debt.

Biden's announcement expanding his forgiveness plan came just one day later, but organization leaders say it's not enough.

The Student Debt Crisis Center (SDCC), one of the organizations that signed the letter, said they "applaud" the further debt cancellation, but it does not satisfy the type of debt relief they're seeking.

The letter, penned by organizations including the National Association for the Advancement of Colored People (NAACP) and American Federation of Teachers, originally asked for "negotiated rule-making" to have discussions with a committee representing borrowers facing different kinds of financial adversity. The last time negotiated rule-making took place was in December, and some felt not enough change was brought forward.

The 67 organizations in the letter represent people of color, women, teachers, veterans, Americans with disabilities and a wide host of other people who might be facing increased hardship after taking out students loans.

"We cannot allow bureaucratic processes and timelines to serve as a barrier to desperately needed relief for the American people," the letter reads. "The Department cannot wait until it is too late; it must act now and establish a fourth rule-making session to ensure the promise of student debt cancellation happens swiftly as we embark upon a new year."

Before the Supreme Court struck down Biden's proposal to clear 40 million borrowers' debts last year, 12 million people had already been approved.

Since then, the DOE used the negotiation rule-making process from the Higher Education Act of 1965 to add more relief in small pieces.

However, despite the negotiation rule-making sessions starting in July and ending in December, many have been unimpressed so far by Biden's student loan reversals, calling them too small in scale.

"While we support full student debt cancellation, we always applaud any and all debt being cancelled by this administration," Natalia Abrams, president and founder of the SDCC, told Newsweek. "We expect more debt to be cancelled in the coming months."

This hasn't changed since Biden announced his $5 billion student debt erasure today, organization leaders said, and they still want a fourth session to create a "robust rule" that would provide relief for all borrowers facing hardship.

"In response to the Department's questions, negotiators worked tirelessly and in good faith to provide the Department with comprehensive proposals," the letter reads. "Failing to finalize a proposal to provide relief for borrowers experiencing hardship would result in millions of borrowers – including most recent graduates, many low-income borrowers, borrowers of color, and borrowers with disabilities – being left out of the necessary debt relief. This cannot be an option."