On Aug. 24, 2022, President Biden announced a three-pronged plan promising student loan relief for borrowers who need it most.
The first step is to “provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.” Borrowers with an individual income of under $125,000 are eligible for this relief, and requirements vary for married individuals and households.
The second step is to cut monthly payments for undergraduate loans in half and enforce Public Service Loan Forgiveness (PSLF) which ensures that borrowers who have “worked at a nonprofit, in the military, or in federal, state, tribal, or local government” receive credit toward loan forgiveness.
The third and last step is to reduce the cost of college through loans, grants and university accountability.
Beyond these specifications, it is not 100% clear how this program will be implemented. The University of Michigan’s Office of Financial Aid has stated that because “information is still very limited about the Student Debt Relief Plan that was recently announced by the Biden-Harris Administration, (the) office does not have specific details on the implementation of this program.”
What may seem unexpected, especially to those who benefit from this program, is the profusion of criticism this seemingly simple initiative has been subject to from all sides. From economists raising concerns about taxpayer burden and skyrocketing inflation to educational analysts debating the root of the student debt problem, Biden’s proposal has incurred heavy skepticism.
One argument, however, stands apart from many others. While most have chosen to focus on the content of the plan, some critics question whether an initiative of this scale and quality is even under the president’s jurisdiction.
The answer to this dilemma, in short, is no. The administration’s power is restricted to the loan forgiveness programs which have been approved by Congress. The administration has pointed to a specific section of the Higher Education Relief Opportunities for Students (HEROES) Act which gives the U.S. Secretary of Education the authority to “modify, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” However, this quote is taken out of context; the preamble of this section limits these powers to be used only when operating a Congressionally approved loan forgiveness program. But even with this contingency, President Biden’s initiative is shaping up to be the latest test of the administration’s legal powers during the COVID-19 pandemic.
The COVID-19 pandemic has hit the academic sphere and its students hard, and it is this detail that changes the rules of the game. Should the initiative be challenged in court, the Biden administration is prepared to respond with the HEROES Act which “gives the education secretary sweeping authority to cancel student loans to address financial hardship arising out of the COVID-19 pandemic,” according to the administration.
But why exactly is the president’s shifting of jurisdiction inspiring the heated controversy we see today? The root of this problem may lie in conservative America’s wish to preserve old legislation that might not even be relevant today. In giving the Biden administration the ability to forgive loans or “tea(ch) an old law new tricks,” power shifts away from an unproductive, severely divided Congress that enables the continued use of old law through inaction.
American citizens must now ask themselves whether debating the value of old law is more important than addressing the issue of declining enrollment in educational institutions before it is too late.
The National Student Clearinghouse Research Center recently released their enrollment figures for the year, and the numbers are staggering. Spring 2022 undergraduate programs feature a 4.7% (662,000 students) drop in enrollment from the previous spring. Over the past eight years, college enrollment has seen an 11% drop, even though the majority of Americans still value higher education. These rapidly declining numbers are largely attributed to “concerns about student debt and paying for college.”
Beyond the increasing wage gap between college graduates and others, the decline in college graduates impacts the economy by leaving thousands of jobs requiring a four-year degree, associate degrees or other related credentials. This has led many jobs to remain vacant across the nation.
While Biden’s loan forgiveness is by no means complete salvation for student borrowers and certainly creates waves in a rapidly fluctuating economy, the initiative at least makes an attempt to fix the sharp decline in college enrollment and urges universities to reconsider their inflating tuition rates. By pushing the boundaries of the administration’s legal power, President Biden’s loan forgiveness initiative has introduced the possibility of further forgiveness and a reversal in what seems to be an ever increasing price tag. Given these benefits, and the risk of further inaction, it is not the time to debate the credibility of this initiative, but rather to consider how to improve upon its foundation and return the right to higher education to students.
Reva Lalwani is an Opinion Columnist and can be reached at firstname.lastname@example.org.