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Student Debt

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Author: Lorna Collier

Pub. Date: 2022

Product: CQ Researcher

DOI: https://doi.org/10.4135/cqr_ht_college_debt_2022

Topics: College Financing and Funding, Education, Cost of Education and School Funding, Education Policy,

Education Standards and Testing, Online Education, Undergraduate and Graduate Education

Access Date: November 21, 2023

Publishing Company: CQ Press

City: Thousand Oaks

© 2022 CQ Press All Rights Reserved.

Abstract

President Biden announced a major federal student loan forgiveness program in August that could

erase loans for about 20 million Americans, substantially cut debt for millions more and favorably

change repayment and forgiveness terms for future borrowers. The plan — estimated to cost $400 bil-

lion or more over the next decade — drew legal challenges from opponents who say Biden lacks such

authority, creating uncertainty for borrowers and loan servicers. Meanwhile, the pandemic pause on

loan payments expires at the end of 2022; starting in January, borrowers will need to resume monthly

payments. At the local level, more states are greenlighting tuition-free colleges and aid to help combat

rising education costs.

Current Situation

President Biden speaks about his new student loan forgiveness plan on Oct. 17 alongside

U.S. Secretary of Education Miguel Cardona. The plan, which could erase loans for about 20

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million borrowers, is already facing mounting legal challenges in federal court. (Getty Im-

ages/Alex Wong)

President Biden announced a sweeping student loan forgiveness initiative in August, promising to erase loans

of up to $20,000 for an estimated 20 million borrowers, along with other relief measures that could significant-

ly cut loan payments for millions of existing and new borrowers. 1

However, the plan — which Biden implemented through executive action — is facing legal obstacles from

Republican lawmakers, conservative advocacy groups and others, who are challenging Biden’s right to uni-

laterally make such broad and costly moves.

On Oct. 21, a federal appeals court temporarily halted Biden’s plan until the appeal of a case filed by a group

of GOP-led states on the matter is heard. If courts rule in favor of the challengers, the relief plan may never

be executed. 2

Adding to the uncertainty for the 43 million Americans who owe a cumulative $1.6 trillion in federal student

debt is that loan payments — paused for almost three years due to the COVID-19 pandemic — are set to

resume in January. This debt repayment, coming so close to when millions of applicants are filing for debt

forgiveness, could not only stress the U.S. loan servicing system, but force borrowers to make monthly pay-

ments during a time of high inflation. (The average monthly student loan payment is estimated at $460). 3

“We’re hearing from folks who, for the first time, really felt hopeful that something’s going to be done,” says

Cody Hounanian, executive director of the Student Debt Crisis Center, a Los Angeles-based advocacy or-

ganization. However, talk of legal challenges has turned their hope to concern, he says. Others are simply

perplexed. “We’re hearing from hundreds of borrowers who are confused and frustrated,” Hounanian says,

explaining that people want to apply for loan relief but are not sure what to do.

On Oct. 17, the Department of Education began accepting online applications for the loan forgiveness pro-

gram, expected to be open through Dec. 31, 2023. More than 8 million people applied on the first day, Biden

said. 4

The application process could take four to six weeks. The tight timeline caused Sen. Elizabeth Warren and

Rep. Ayanna Pressley, two Massachusetts Democrats who strongly support loan forgiveness, to write to loan

servicing companies asking if they can handle the workload, given a history by some of errors and other prob-

lems. 5

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The Education Department’s readiness is also an issue. “Rolling the applications out in October doesn’t give

people a lot of time,” said Kyra Taylor, an attorney at the National Consumer Law Center, a consumer ad-

vocacy nonprofit, noting that the department’s official website dedicated to loan forgiveness, StudentAid.gov,

crashed after the program was announced. 6

The key provisions of Biden’s student loan forgiveness plan include:

One-time debt forgiveness. Biden fulfilled a 2020 campaign promise by forgiving $10,000 in student debt

for those with adjusted annual gross incomes of less than $125,000 (or $250,000 in household income for a

married person filing jointly). 7

Additionally, those with Pell grants, about 27 million borrowers, can have up to $20,000 of student debt can-

celled. Pell grants are awarded based on income, with 66 percent of recipients coming from families making

$30,000 a year or less. This helps more low-income people as well as Black students, who have a dispro-

portionately higher number of student loans, owe greater amounts on average and have higher rates of de-

fault. Black students are more likely to get Pell grants. In the 2015-2016 academic year, the most recent data

available, 58 percent of all Black students were Pell recipients, compared to white students (32 percent) and

Hispanics (47 percent), according to an August analysis. 8

Debt forgiveness of $10,000 to $20,000 can have a significant impact for most borrowers, even if the loans

are not completely cleared. Among federal borrowers, about one-third owe less than $10,000; another 20

percent owe between $10,000 and $20,000; and 21 percent owe between $20,000 and $40,000. 9

New repayment plan. Biden’s plan also includes cost savings for new as well as existing borrowers through

a new income-driven repayment (IDR) plan, expected sometime next year. The plan cuts monthly bills to 5

percent of borrowers’ discretionary income from the current 10 percent. It also changes the formula for dis-

cretionary income, resulting in even lower bills. 10

Not only will loan payments be smaller, but those with original loans of $12,000 or less could have the balance

of their loans forgiven after 10 years of payments. Larger loans will need to be paid down for 20 years before

qualifying for cancellation. While loans are being paid off, interest on unpaid balances will not build up. This

means that loans will not grow larger than their original amount, so long as payments are made on time. 11

More details about the IDR plan have yet to be released, including whether it will apply to graduate or Parent

PLUS loans (so far, only undergraduate loans have been designated for coverage in the plan). 12

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Biden’s proposals apply to federal loans, which comprise almost 92 percent of student loans and are held by

the government. It is unclear whether any private loans will eventually be included. 13

Initially, the Biden plan included two types of older (pre-2010) loans guaranteed — but not directly held —

by the federal government: Federal Family Education Loans (FFELs) and Perkins loans. However, on Sept.

29, the Department of Education amended its rules to say these loans could qualify for forgiveness only if the

borrower had sought to convert these to direct loans before Sept. 29. About 800,000 borrowers no longer are

eligible — though the department said on its website that it was exploring alternative relief options for such

borrowers. 14

More state universities are offering free tuition, especially to certain groups. This summer,

the University of California system, which includes the prestigious Berkeley campus, pic-

tured here, announced it would waive tuition for students from Native American tribes start-

ing in the Fall 2022 semester. (Getty Images/Justin Sullivan)

When federal loans are forgiven, taxpayers ultimately bear their costs. The Biden plan is budgeted at $379

billion over 10 years — a figure that includes FFEL and Perkins loan forgiveness. 15

The Congressional Budget Office has estimated the cost of forgiveness over the next 10 years at about $400

billion. Other economic estimates range from $400 billion to $600 billion, with the University of Pennsylvania’s

Penn Wharton Budget Model, a fiscal forecasting and behavioral initiative, topping out at more than $1 trillion

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when changes to income-based repayment are included. 16

But there are many criticisms of Biden’s plan from members of both political parties, such as:

• Benefits are too small. Legislators such as Warren have advocated for $50,000 of forgiveness. Der-

rick Johnson, president of the NAACP, said the amount of forgiveness is too low and will leave too

many Black students in debt. 17 On the other hand, Fenaba Addo, associate professor of public poli-

cy at the University of North Carolina at Chapel Hill and co-author of A Dream Defaulted: The Student

Loan Crisis Among Black Borrowers, says she was “pleasantly surprised” by the plan’s features but

hopes it is a first step, not a final one.

• It is inequitable. Some say the plan is unfair to those who paid off their loans or never borrowed for

college, and that it requires lower-income taxpayers to pay debts of the college-educated. Twenty-

two Republican governors wrote a letter to Biden demanding he rescind the plan, arguing it would

“force American taxpayers to pay off the student loan debt of an elite few.” They say that those who

borrowed money for college should be responsible adults and pay back what they owe. 18 Howev-

er, The New York Times opinion columnist and economist Paul Krugman writes that many student

borrowers were “suckered” by for-profit institutions or had not been able to land good jobs after grad-

uation during the Great Recession from 2007 to 2009. “Many, though not all, of those who will benefit

from debt forgiveness are, in fact, victims of circumstances beyond their control,” he wrote. 19

• Could raise inflation. “Pouring roughly half [a] trillion dollars of gasoline on the inflationary fire that

is already burning is reckless,” tweeted Jason Furman, a Harvard economics professor and former

economic adviser to the Obama administration. The Committee for a Responsible Federal Budget, a

private fiscal watchdog group, said the plan would undermine gains from the Inflation Reduction Act

of 2022. 20 Others argue that the effect will not be significant. Krugman writes that having borrowers

resume payments in January “will suck considerably more cash out of the economy than debt relief

will put back in.” 21

• Does not bring down costs. “You’re basically encouraging schools to just raise their tuition even more

if we don’t do other things to reform the system,” says Lanae Erickson, senior vice president for so-

cial policy, education and politics with Third Way, a center-left think tank.

However, she says, some less-heralded parts of the Biden plan do address more long-term solutions, such

as stronger efforts to weed out fraud and abuse among colleges; rewriting rules to motivate colleges to better

prepare students for the job market and creating a watchlist of programs that leave students with high debt.

22

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Legal Actions

Republicans as well as some Democrats have objected to Biden’s plan — and some are already challenging

it in court.

Some lawmakers say Biden overstepped his authority. In 2021, House Speaker Nancy Pelosi, D-Calif., said

she believed that Biden could not cancel debt through executive action, because fiscal matters are normally

handled by Congress. More recently, however, she has supported Biden’s move, calling it a “bold action” in a

news release after the plan was announced. 23

Other lawmakers disagree. “This administration is exceeding its legal authority and illegally burdening hard-

working Americans with debts they didn’t take on themselves,” said Sen. Ted Cruz, R-Texas, in a statement.

24

However, the Biden administration says it has the right to use executive action to provide student debt relief

during a national emergency, such as the COVID-19 pandemic. It cites a memo by the Department of Justice

upholding Biden’s actions under a provision in the Higher Education Relief Opportunities for Students (HE-

ROES) Act of 2003, written after the 9/11 terrorist attacks. 25

Opinion among legal and education experts is split on how Biden might fare in court.

Fordham University law professor Jed Shugerman, who supports means-tested student debt relief, said

Biden’s use of the HEROES Act to defend his action is “a loser argument” with the current conservative

Supreme Court, and that other legal strategies might fare better. 26

Other experts say Biden is on solid legal ground, and that lawsuits could be problematic due to an inability

to find a plaintiff with legal standing to sue, since a plaintiff would have to demonstrate that he or she had

incurred damages from Biden’s order. 27

Several lawsuits challenging the decision have been filed, including:

• Six GOP-led states (Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) jointly filed

suit in federal court, calling the debt cancellation unlawful and asking a federal judge in Missouri for

a preliminary injunction to halt the program until a ruling is made. The judge denied the injunction

based on a lack of standing by the states. But one day later, on Oct. 21, the U.S. Court of Appeals for

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the Eighth Circuit granted a temporary hold on Biden’s plan until the injunction appeal case is heard.

28

• A conservative public interest law firm in California, the Pacific Legal Foundation, filed suit in late

September in another federal court on behalf of an Indiana employee of the firm with federal student

loans. The suit argues the employee may have to pay state income tax on any forgiven loan balance

(several states may levy local or state taxes on forgiven loans). 29

• A legal challenge filed by the Wisconsin Institute for Law and Liberty on behalf of the Brown County

Taxpayers Association was dismissed by a federal judge on Oct. 6 for lack of standing. The group

then filed an emergency appeal to Supreme Court Justice Amy Coney Barrett, who oversees such

actions in that circuit. Barrett declined the request, allowing the judge’s dismissal to stand. 30

• An Oregon man, Daniel Laschober, filed suit in federal court on Sept. 12, arguing that the loan plan

will worsen inflation, thereby raising his mortgage interest. Laschober ran unsuccessfully as a Re-

publican U.S. Senate candidate in 2016. 31

Other plantiffs who are likely to have legal standing include loan servicing companies or their trade associa-

tions, says Erickson of Third Way. However, Jack Remondi, CEO of loan servicer Navient, said the company

does not plan on suing. 32

If Republicans win control of the U.S. House in the November midterm elections, “Congress itself can sue

and absolutely has standing,” Erickson says. If a court blocks loan forgiveness, she does not think already

processed loan cancellations would be rescinded, but those that have not made it through the system might

be rejected.

Erickson criticized Biden for ignoring likely legal roadblocks. “I think promising people something that you

know for sure many of them will never get is bad policymaking,” she says.

Federal Actions

Since taking office, Biden has already forgiven nearly $32 billion in federal loans in a series of moves targeting

specific types of borrowers. 33

For example, the Biden administration has helped many borrowers who worked for at least 10 years in public

service jobs, such as teaching or law enforcement, receive loan forgiveness under the Public Service Loan

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Forgiveness program. Out of about 1.7 million applicants to date, nearly 165,000 (or 9.7 percent) have been

approved. This is a substantially higher rate than the 1 percent to 2 percent approved under the Trump ad-

ministration. Biden put into effect a temporary waiver, expiring Oct. 31, that allows more applicants to win

awards by relaxing the system’s complex rules governing how borrowers qualify for forgiveness, a measure

some legislators hope to make permanent. 34

The Education Department also stepped up actions to help students defrauded by for-profit colleges win dis-

charge of their loans. One strategy the department has begun using is to file claims automatically on behalf

of students against suspect institutions, rather than waiting for students to individually file claims. In one large

case involving automatic claims filed against more than 150 institutions, a $6 billion tentative settlement af-

fecting about 200,000 borrowers was reached in August, with a final hearing set for November. 35

Meanwhile, Republican House members introduced an alternative plan for student debt relief in early August.

Reps. Virginia Foxx of North Carolina, Elise Stefanik of New York and Jim Banks of Indiana said their Respon-

sible Education Assistance through Loan Reforms Act targets relief to students most in need, while avoiding

“broad student loan forgiveness for those earning six-figure salaries.” The bill would cap borrowing for grad-

uate students, end the Public Service Loan Forgiveness program for new borrowers and allow Pell grants to

be spent on short-term job training, among other steps. 36

Democratic legislators, on the other hand, proposed making Biden’s Public Service Loan Forgiveness waiver

permanent and shortening its work requirement from 10 to five years. The bill was introduced in the Senate in

May by Sen. Sheldon Whitehouse of Rhode Island and in the House in July by Joe Courtney of Connecticut.

However, the measure appears to lack Republican support. 37

Two other bills introduced by Whitehouse in March would forgive student loan debt for frontline health care

workers and teachers. House versions of the bills also were introduced, which would not entirely forgive the

debt but would increase the amount of forgiveness in certain cases. 38

State Actions

Nearly 30 states now have statewide free college programs, often at community colleges. 39

Meanwhile, tuition at colleges and universities is rising at a historically low rate, the College Board, a nonprofit

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research and testing organization, found in an October report. Average annual in-state tuition for public four-

year colleges rose by 1.8 percent, while rates at private four-year colleges increased by 3.5 percent. These

hikes are below the rate of inflation, which was at 8.2 percent in September. They also represent the third

straight year in which college costs have seen minimal to no increases. However, experts fear that if inflation

continues, eventually tuition will rise along with it. 40

Some individual institutions have already hiked tuition for the 2022-2023 school year at higher rates than in

the past two years. For example, Howard University raised tuition by 7 percent, Oregon Institute of Technolo-

gy by 6.6 percent and Syracuse University by 4.5 percent. 41

Prior to COVID-19, tuition had been on a decades-long climb, up by 747.8 percent in inflation-adjusted dollars

since 1963, according to the Education Data Initiative. 42

One reason tuition has been higher — especially since the 2007-2009 Great Recession — is less contribu-

tions from cash-strapped states. However, recent reports show that states gave more to colleges in 2021 than

in 2020 (up by about 4.5 percent above inflation), largely by using federal pandemic relief funds. It is unclear

whether this trend will continue without such relief. 43

Recently, more states have begun offering free college tuition to Native Americans. Members of Oregon’s

nine federally recognized tribes can attend public universities and community colleges tuition-free. Oregon

also offered in-state tuition to members of other federally recognized tribes living in other states. Other state

universities that announced free tuition for Native Americans in 2022 included the University of Arizona and

the University of California system. 44

In March, New Mexico became one of 33 states offering some type of free college tuition, with benefits more

generous than most. Gov. Michelle Lujan Grisham signed a $75 million scholarship bill waiving tuition for one

year for residents attending any type of in-state public school or tribal college, including four-year and com-

munity colleges. To receive free tuition, students have to enroll a minimum of six credit hours and maintain a

grade point average of at least 2.5. Funding for the program — largely derived from federal pandemic relief

— could cover tuition for as many as 35,000 students. 45

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Private Actions

Increasingly, businesses are helping employees pay off their student loans, with even more expected to do so

next year. A 2022 survey of employers by consulting firm Willis Towers Watson found that one-third of firms

expect to give contributions for their employees’ student loans by 2023, compared to 8 percent in 2021. 46

“It’s becoming more common — not just among Fortune 500 corporations, but midsize and smaller compa-

nies, too,” said Kristen Carlisle, general manager of Betterment at Work, a financial services firm that offers

student loan management resources. “Employees are asking for it.” 47

Some private colleges also offer ways to cover debt. For example, Princeton University is expanding its schol-

arship program next fall to provide free tuition for undergraduates from families earning up to $100,000 annu-

ally (previously only those with incomes below $65,000 could receive the benefit). 48

Philanthropists have been helping, too. Graduates at Wiley College in Marshall, Texas, a 150-year-old his-

torically Black college, were stunned at their May 2022 graduation ceremony by the announcement that an

anonymous donor was paying off their student debts. The donor gave $300,000 to cover the loans for more

than 100 graduates. 49

College President and CEO Herman J. Felton Jr. broke the news by exclaiming: “You are debt free! You do

not owe the college a penny.” 50

Footnotes

1. Brett Holzhauer and Trina Paul, “Student loan debt forgiveness is approved, up to $20,000 per borrower

— here’s who qualifies,” CNBC, Aug. 25, 2022, https://www.cnbc.com/select/biden-to-erase-up-to-20k-in-stu-

dent-loan-debt-heres-who-qualifies/.

2. Katie Lobosco, “Biden administration scales back student loan forgiveness plan as states sue,” CNN, Sept.

30, 2022, https://www.cnn.com/2022/09/29/politics/biden-student-loan-forgiveness-plan-lawsuit/index.html;

Danielle Douglas-Gabriel, “Lawsuit aims to stop Biden’s student loan forgiveness plan,” The Washington Post,

Sept. 27, 2022, https://www.washingtonpost.com/education/2022/09/27/lawsuit-student-loan-forgiveness/;

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Annie Nova, “’There’s a lot of people celebrating prematurely’: GOP could bring a legal challenge to block

Biden’s student loan forgiveness plan,” CNBC, Sept. 7, 2022, https://www.cnbc.com/2022/09/07/republicans-

may-try-to-block-student-loan-forgiveness.html; and Stacy Cowley and Alan Rappeport, “Appeals Court Tem-

porarily Halts Biden’s Student Debt Cancellation,” The New York Times, Oct. 21, 2022, https://www.ny-

times.com/2022/10/21/business/appeals-court-student-debt-relief-biden.html.

3. Melanie Hanson, “Student Loan Debt Statistics,” Education Data Initiative, July 29, 2022, https://educa-

tiondata.org/student-loan-debt-statistics; Melanie Hanson, “Average Student Loan Payment,” Education Data

Initiative, March 1, 2022, https://educationdata.org/average-student-loan-payment.

4. Stacy Cowley and Alan Rappeport, “Biden Opens Applications for Student Debt Cancellation,” The New

York Times, Oct. 17, 2022, https://www.nytimes.com/2022/10/17/business/student-loans-cancel-debt-appli-

cations.html.

5. Ayelet Sheffey, “Elizabeth Warren and Ayanna Pressley want to know how 9 student loan companies will

avoid causing ’grave harm to borrowers’ while implementing Biden’s debt cancellation,” Business Insider,

Sept. 12, 2022, https://www.businessinsider.com/warren-pressley-student-loan-companies-harm-borrowers-

biden-debt-cancellation-2022-9.

6. Shannon Pettypiece and Lauren Egan, “Student debt cancellation rollout could get messy, consumer

groups and lenders warn,” NBC News, Sept. 5, 2022, https://www.nbcnews.com/politics/politics-news/stu-

dent-debt-cancellation-rollout-get-messy-consumer-groups-lenders-wa-rcna45323.

7. “Are you looking for student loan debt relief?” Federal Student Aid, U.S. Department of Education, 2022,

https://studentaid.gov/debt-relief-announcement/one-time-cancellation.

8. Wesley Whistle, “Why Pell Grant Recipients Are Getting Double the Debt Relief Under Biden’s Plan,”

Slate, Aug. 26, 2022, https://slate.com/human-interest/2022/08/what-is-a-pell-grant-why-recipients-get-more-

debt-relief.html.

9. Paul Waldman, “Biden’s new student loan forgiveness plan is a good start,” The Washington Post,

Aug. 24, 2022, https://www.washingtonpost.com/opinions/2022/08/24/biden-student-loan-forgiveness-good-

start; Alyssa Fowers and Danielle Douglas-Gabriel, “Who has student loan debt in America?” The Washington

Post, Aug. 24, 2022, https://www.washingtonpost.com/education/2022/05/22/student-loan-borrowers/.

10. Peter Butler, “New Student Loan Plan Would Cut Payments by More Than Half: How It Works,” CNET,

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Aug. 29, 2022, https://www.cnet.com/personal-finance/loans/new-student-loan-plan-would-cut-payments-by-

more-than-half-how-it-works/.

11.Ibid.; Danielle Douglas-Gabriel and Jeff Stein, “Who qualifies for Biden’s plan to cancel $10,000 in student

debt?” The Washington Post, Aug. 31, 2022, https://www.washingtonpost.com/education/2022/08/24/student-

loan-forgiveness-plan-explained/; Preston Cooper, “The Hidden Costs Inside Biden’s Student Loan Bailout,”

Foundation for Research on Equal Opportunity, Aug. 30, 2022, https://freopp.org/bidens-income-based-re-

payment-expansion-could-prove-costlier-than-loan-forgiveness-2b7ada225d36; and Adam S. Minsky, “How

Biden’s New Income Based Plan May Work For Student Loan Borrowers, And When To Apply,” Forbes,

Sept. 12, 2022, https://www.forbes.com/sites/adamminsky/2022/09/12/how-bidens-new-income-based-plan-

may-work-for-student-loan-borrowers-and-when-to-apply/.

12. Minsky, op. cit.

13. Anna Helhoski and Ryan Lane, “Student Loan Debt Statistics: 2022,” NerdWallet, Aug. 25, 2022,

https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt.

14. Cory Turner, “In a reversal, the Education Dept. is excluding many from student loan relief,” NPR, Sept.

30, 2022, https://www.npr.org/2022/09/29/1125923528/biden-student-loans-debt-cancellation-ffel-perkins.

15. “U.S. Department of Education Estimate: Biden-Harris Student Debt Relief to Cost an Average of

$30 Billion Annually Over Next Decade,” press release, Department of Education, Sept. 29, 2022,

https://www.ed.gov/news/press-releases/us-department-education-estimate-biden-harris-student-debt-relief-

cost-average-30-billion-annually-over-next-decade.

16. Katie Rogers and Jim Tankersley, “White House Student Loan Forgiveness Could Cost About $400 Bil-

lion,” The New York Times, Sept. 26, 2022, https://www.nytimes.com/2022/09/26/us/politics/white-house-stu-

dent-loan-forgiveness.html; “The Biden Student Loan Forgiveness Plan: Budgetary Costs and Distributional

Impact,” University of Pennsylvania Penn Wharton Budget Model, Aug. 26, 2022, https://budgetmodel.whar-

ton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness.

17. Eric Cortellessa, “Fact-checking 6 Criticisms of Biden’s Student Loan Forgiveness Plan,” Time, Aug. 26,

2022, https://time.com/6208871/biden-student-loans-criticism-fact-check/.

18. “22 Republican Governors Blast Biden’s Student Loan Forgiveness Plan,” news release, Republican Gov-

ernors Association, Sept. 12, 2022, https://www.rga.org/22-republican-governors-blast-bidens-student-loan-

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forgiveness-plan/.

19. Paul Krugman, “The Two Big Questions About Student Debt Relief,” The New York Times, Aug. 25, 2022,

https://www.nytimes.com/2022/08/25/opinion/student-debt-relief-biden.html.

20. Jason Furman, Twitter post, Aug. 24, 2022, https://twitter.com/jasonfurman/status/

1562503985529233410; “Student Debt Changes Would Boost Inflation,” Committee for a Responsible Fed-

eral Budget, Aug. 26, 2022, https://www.crfb.org/blogs/student-debt-changes-would-boost-inflation.

21. Krugman, op. cit.

22. Michelle Dimino, “What’s Next Post-Cancellation? Holding Colleges Accountable for Student Outcomes,”

Third Way, Sept. 6, 2022, https://www.thirdway.org/blog/whats-next-post-cancellation-holding-colleges-ac-

countable-for-student-outcomes; “Biden-Harris Administration Announces Final Student Loan Pause Exten-

sion Through December 31 and Targeted Debt Cancellation to Smooth Transition to Repayment,” news re-

lease, U.S. Department of Education, Aug. 24, 2022, https://www.ed.gov/news/press-releases/biden-harris-

administration-announces-final-student-loan-pause-extension-through-december-31-and-targeted-debt-can-

cellation-smooth-transition-repayment.

23. Annie Nova, “Pelosi says Biden doesn’t have power to cancel student debt,” CNBC, July 28, 2021,

https://www.cnbc.com/2021/07/28/pelosi-says-biden-doesnt-have-authority-to-cancel-student-debt-.html;

“Pelosi Statement on President Biden’s Historic Student Debt Relief,” news release, Office of the Speaker of

the House, Aug. 24, 2022, https://www.speaker.gov/newsroom/82422-2.

24. “Sen. Cruz Issues Statement on Biden Admin’s Illegal Student Loan Debt Cancellation,” news release,

Office of Sen. Ted Cruz, Aug. 24, 2022, https://www.cruz.senate.gov/newsroom/press-releases/sen-cruz-is-

sues-statement-on-biden-admins-illegal-student-loan-debt-cancellation.

25. Alan Rappeport, “Biden’s Student Loan Plan Could Face a Protracted Legal Fight,” The New York Times,

Sept. 1, 2022, https://www.nytimes.com/2022/09/01/us/politics/biden-student-loan-plan-lawsuits.html.

26. Doug Most, “Would Biden’s Debt Forgiveness Plan Survive a Court Challenge?” BU Today, Aug. 26, 2022,

https://www.bu.edu/articles/2022/would-biden-student-loan-forgiveness-plan-survive-court-challenge/.

27. David Dayen, “Why It’ll Be Tough for Republicans to Cancel Student Debt Cancellation,” The American

Prospect, Sept. 8, 2022, https://prospect.org/education/why-itll-be-tough-for-republicans-to-cancel-student-

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debt-cancellation/.

28. Lobosco, op. cit.; Danielle Douglas-Gabriel, “GOP-led states urge judge to block Biden student debt relief

plan,” The Washington Post, Oct. 12, 2022, https://www.washingtonpost.com/education/2022/10/12/student-

loan-forgiveness-republican-lawsuit/; and “Appeals Court Temporarily Halts Biden’s Student Debt Cancella-

tion,” op. cit.

29. Danielle Douglas-Gabriel, “Lawsuit aims to stop Biden’s student loan forgiveness plan,” The Washington

Post, Sept. 27, 2022, https://www.washingtonpost.com/education/2022/09/27/lawsuit-student-loan-forgive-

ness/; Danielle Douglas-Gabriel, “These states could tax Biden’s student debt relief,” The Washington Post,

Sept. 10, 2022, https://www.washingtonpost.com/education/2022/09/10/state-taxes-student-loan-forgive-

ness/.

30. Scott Hurley, “Taxpayers association appeals dismissal of lawsuit over student debt forgiveness,” Fox 11

News, Oct. 11, 2022, https://fox11online.com/news/local/brown-county-taxpayers-association-bcta-appeals-

dismissal-lawsuit-student-debt-forgiveness-president-joe-biden-wisconsin-institute-law-liberty-will-judge-

william-griesbach; Sam Levine, “Supreme court declines to stop Biden’s $400bn student debt relief plan,”

The Guardian, Oct. 21, 2022, https://www.theguardian.com/money/2022/oct/21/supreme-court-case-student-

loan-forgiveness-update.

31. Courtney Rozen and Peter Hayes, “Biden Student Loan Plan Faces Lawsuit from Ex-Senate Hopeful,”

Bloomberg Law, Sept. 13, 2022, https://news.bloomberglaw.com/us-law-week/biden-student-loan-plan-faces-

lawsuit-from-ex-senate-candidate.

32. Ayelet Sheffey, “CEO of a major student-loan company says he won’t sue Biden on debt cancellation even

though he ’clearly’ has standing,” Business Insider, Sept. 16, 2022, https://www.businessinsider.com/navient-

ceo-wont-sue-biden-student-loan-debt-forgiveness-standing-2022-9.

33. Lauren Bird, “President Biden forgives close to $4 billion in student debt — what’s next?” Yahoo Finance,

Aug. 17, 2022, https://finance.yahoo.com/news/president-biden-forgives-nearly-4-200000606.html.

34. Helhoski and Lane, op. cit.; Cory Turner, “Data Shows 99% Of Applicants For A Student Loan Forgiveness

Program Were Denied,” NPR, Sept. 21, 2018, https://www.npr.org/2018/09/21/650508381/data-shows-99-of-

applicants-for-student-loan-forgiveness-denied; and Michelle Singletary, “A deadline is looming for Public Ser-

vice Loan Forgiveness waiver,” The Washington Post, Oct. 7, 2022, https://www.washingtonpost.com/busi-

Sage

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ness/2022/10/07/pslf-loan-forgiveness-deadline/.

35. Natalie Schwartz, “Here’s a list of the colleges in the Sweet v. Cardona settlement agreement,” Higher

Ed Dive, Sept. 28, 2022, https://www.highereddive.com/news/heres-a-list-of-the-colleges-in-the-sweet-v-car-

dona-settlement-agreement/629283/.

36. “Stefanik, Foxx, Banks Announce Responsible Alternative to Biden’s Blanket Student Loan Scheme,”

news release, Office of Rep. Elise Stefanik, Aug. 5, 2022, https://stefanik.house.gov/2022/8/stefanik-foxx-

banks-announce-responsible-alternative-to-biden-s-blanket-student-loan-scheme; Ayelet Sheffey, “3 Republi-

can lawmakers just countered Biden’s student-loan-forgiveness plans with a bill of their own to help borrowers

’most in need,’ ” Business Insider, Aug. 4, 2022, https://www.businessinsider.com/gop-counters-bidens-stu-

dent-loan-forgiveness-new-bill-income-pslf-2022-8.

37. Meghan Brink, “Democrats Want Public Service Loan Waiver Made Permanent,” Inside Higher Ed, July

20, 2022, https://www.insidehighered.com/news/2022/07/20/bill-proposes-making-pslf-waiver-permanent.

38. “Whitehouse Introduces Bills to Grant Student Loan Forgiveness to Frontline Health Workers and Teach-

ers,” news release, Office of Sen. Sheldon Whitehouse, March 16, 2022, https://www.whitehouse.senate.gov/

news/release/whitehouse-introduces-bills-to-grant-student-loan-forgiveness-to-frontline-health-workers-and-

teachers; Michael Losak, Vrushab Gowda and Christian Rose, “Congress Should Provide Student Debt Relief

To Frontline Health Care Workers,” HealthAffairs, Aug. 12, 2022, https://www.healthaffairs.org/content/fore-

front/congress-should-provide-student-debt-relief-frontline-health-care-workers.

39. Jessica Dickler, “Free college is now a reality in nearly 30 states,” CNBC, April 8, 2022, https://www.cn-

bc.com/2022/04/08/free-college-is-now-a-reality-in-nearly-30-states.html.

40. Josh Moody, “Report: Small Rise in Tuition Rates,” Inside Higher Ed, Oct. 24, 2022, https://www.inside-

highered.com/news/2022/10/24/college-board-report-shows-minimal-tuition-increases.

41. Josh Moody, “Inflation Swells Tuition Prices,” Inside Higher Ed, May 13, 2022, https://www.inside-

highered.com/news/2022/05/13/tuition-held-steady-during-pandemic-now-its-climbing; Nick Anderson and

Danielle Douglas-Gabriel, “The next inflation-driven worry: Rising college tuition,” The Washington Post, Aug.

12, 2022, https://www.washingtonpost.com/education/2022/08/12/college-tuition-inflation-prices/.

42. Anderson and Douglas-Gabriel, op. cit.; Dean Golembeski, “College Tuition Hikes Are Back. Is Inflation

to Blame?” Best Colleges, May 6, 2022, https://www.bestcolleges.com/news/analysis/2022/02/25/college-tu-

Sage

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ition-hikes-inflation-covid-19/; and Melanie Hanson, “College Tuition Inflation Rate,” Education Data Initiative,

Aug. 10, 2022, https://educationdata.org/college-tuition-inflation-rate.

43. Michael Mitchell, Michael Leachman and Matt Saenz, “State Higher Education Funding Cuts Have

Pushed Costs to Students, Worsened Inequality,” Center on Budget and Policy Priorities, Oct. 24, 2019,

https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-

costs-to-students; Josh Moody, “State Higher Ed Funding Rose in 2021,” Inside Higher Ed, June 14,

2022, https://www.insidehighered.com/news/2022/06/14/report-state-higher-ed-funding-45-2021; and Brian-

na McGurran, “College Tuition Inflation: Compare The Cost of College Over Time,” Forbes, March 28, 2022,

https://www.forbes.com/advisor/student-loans/college-tuition-inflation/.

44. Alex Baumhardt, “Oregon joins states offering free and reduced college tuition for Native Americans this

year,” Oregon Capital Chronicle, Aug. 25, 2022, https://oregoncapitalchronicle.com/2022/08/25/oregon-joins-

states-offering-free-and-reduced-college-tuition-for-native-students-this-year/.

45. Leah Asmelash, “New Mexico’s governor just signed a bill to make college tuition-free,” CNN, March

7, 2022, https://www.cnn.com/2022/03/07/us/new-mexico-college-tuition-free-cec/index.html; Alice Fordham,

“New Mexico has one of the most generous ’free tuition’ programs, but there are limits,” NPR, March 21, 2022,

https://www.npr.org/2022/03/21/1087913840/new-mexico-has-one-of-the-most-generous-free-tuition-pro-

grams-but-there-are-limi.

46. Kathryn Mayer, “Will Biden’s forgiveness plan spark interest in student loan benefits?” Human Resource

Executive, Aug. 25, 2022, https://hrexecutive.com/will-bidens-forgiveness-plan-spark-interest-in-student-

loan-benefits/.

47. Dan Avery, “15 Companies That Help Employees Pay Off Their Student Loans,” CNET, Sept. 22, 2022,

https://www.cnet.com/personal-finance/15-companies-that-help-employees-with-student-loan-repayment-as-

sistance/.

48. “Princeton University will offer free tuition to families making less than $100K in 2023 school year,”

ABC 7 News, Sept. 9, 2022, https://abc7news.com/princeton-university-free-tuition-ivy-league-financial-aid/

12217156/.

49. Andre Ellington, “Anonymous Donor Clears Student Debt For Over 100 Graduates At Texas HBCU,”

HuffPost, May 9, 2022, https://www.huffpost.com/entry/anonymous-donor-student-debt-texas-

Sage

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hbcu_n_627967bbe4b0b7c8f087d031.

50. Will DuPree, “Donor pays off debt for entire class at Texas HBCU,” KXAN, May 9, 2022, https://www.kx-

an.com/news/education/donor-pays-off-debt-for-entire-class-at-texas-hbcu/.

About the Author

Lorna Collier is a freelance writer based in northern Illinois.

Chronology

2021

2022

October

A 12-month waiver is announced by the Biden administration that temporarily changes

complicated and onerous rules governing the Public Service Loan Forgiveness program,

allowing more borrowers — such as teachers, nurses and police officers — who work for

10 years in nonprofit or governmental jobs to qualify for debt relief.

February

Tuition-free community college, a Biden administration goal, is removed from the stalled

Build Back Better bill amid Senate negotiations. The bill ultimately fails to pass.

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March

Bills introduced in the Senate aim to forgive student loans for qualifying teachers and

frontline health care workers. … New Mexico Gov. Michelle Lujan Grisham, a Democ-

rat, signs one of the most expansive free tuition laws in the country, waiving tuition for

in-state public college, tribal college or community colleges for one year.

April

President Biden extends a pandemic-related student loan payment pause from May 1 to

Aug. 31, its sixth extension since March 2020. … The U.S. Department of Education ap-

proves $238 million in debt relief to about 28,000 borrowers who attended the Marinello

Schools of Beauty, a for-profit beauty school accused of misconduct — the first time the

department approved such relief without requiring individual applications. … The Univer-

sity of California system announces free tuition for in-state students who are members

of federally recognized Native American tribes.

July

Democratic lawmakers in the House and Senate introduce legislation that would make

Public Service Loan Forgiveness waivers, due to expire Oct. 31, permanent.

August

By executive order, Biden issues a wide-ranging student loan relief plan, along with a

“final” loan payment pause extension through Dec. 31. … Republican House members

introduce an alternative plan for targeted, capped student debt relief. … StudentAid.gov

website crashes as people seek information about the new debt plan. … A temporary

settlement is reached in a case against more than 150 colleges — many of which are

for-profit — automatically awarding $6 billion to about 200,000 defrauded borrowers. …

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https://doi.org/10.4135/cqr_ht_college_debt_2022

Republican lawmakers, state attorneys general and conservative groups explore legal

options to block Biden’s loan forgiveness plan.

September

More than 20 Republican governors send Biden a letter asking him to rescind his student

loan plan. … The first legal challenge to the plan is filed in Oregon by a plaintiff who

contends his mortgage interest will rise as a result of the plan’s cost. … Sen. Elizabeth

Warren and Rep. Ayanna Pressley, both Democrats from Massachusetts, write to nine

federal loan servicers raising concerns about their readiness to resume accurate pro-

cessing of loan payments.

October

The Department of Education begins accepting applications for loan forgiveness; more

than 8 million people apply on the first day, according to President Biden. … A federal

appeals court temporarily halts Biden’s plan until an injunction appeal case by six GOP-

led states against the measure is heard.

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