Biden proposes “better support” for student loan borrowers without debt relief

  • Biden’s budget proposal included $2.7 billion to “better support student loan borrowers.”
  • It recommended improving the earnings-related repayment plan and the forgiveness program for government employees.
  • Student loan forgiveness was not addressed, and payments are set to resume on May 1.

President Joe Biden proposed some help for student loan borrowers in his budget — but the debt relief many are hoping for hasn’t made it.

On Monday, Biden unveiled his $5.8 trillion budget proposal, which included proposals to tax billionaires, fund police and invest in fighting the climate crisis. Education also received a funding request of $88.3 billion — an increase of $15.3 billion from 2021 — with a significant portion of that funding being recommended for K-12 education.

On higher education, Biden proposed a “historic” doubling of the maximum Pell Grant award, an increase in funding for historically black colleges and universities and institutions serving minorities by $752 million, and the provision of 2.7 Billions of dollars for Federal Student Aid (FSA). Funding to “Better Support Student Loan Borrowers”.

“Across the country, we need to focus our efforts on recovery. That means making sure all students – particularly those from underserved communities and those most affected by the pandemic – are given the resources they need to thrive,” Education Minister Miguel Cardona said in a statement. “Importantly, this budget also invests in providing access to affordable higher education and creating stronger pathways that meet the needs of our workforce and connect students with well-paying jobs and fulfilling careers.”

Here are the three ways the department has suggested to help student loan borrowers:

  1. improving customer service for student loan companies;
  2. Ensure borrowers who are forced to switch student loan companies due to service provider closures have a “successful transition” and “more stable long-term” contracts;
  3. And working with Congress on amendments to higher education law that reduce the burden of student debt, including improvements to the Income Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs.

Shortcomings in student loan company contracts and customer support are undoubtedly issues that many borrowers struggle with. Some reported waiting hours for help paying their student debt. But the broad student-loan forgiveness that Biden campaigned for remains unfulfilled, even as lawmakers and advocates say debt forgiveness is the best way to bring immediate relief to federal borrowers.

While Biden has extended student loan payments three times and forgiven debt for certain groups of borrowers, payments are scheduled to resume on May 1. The president is under increasing pressure to either extend that hiatus for a fourth time or cancel student debt. Senate Education Committee Chair Patty Murray, for example, suggested extending the hiatus to 2023 to give Biden time to “permanently fix” the student-loan industry, including loan forgiveness programs.

“Anything we ask can be done at the administrative level,” Murray told reporters last week. “It’s the quickest way to get this going. And we encourage them, ask them, ask them to please do that.”

Of course, the proposals included in Biden’s budget must be approved by Congress in order for them to pass, so higher education proposals are not set in stone. But they reflect the priorities of the administration. This is the second year the budget has been missing broad student loan relief, suggesting the White House may be sticking to its message that it is in the hands of Congress to pass legislation to eliminate student debt.

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