For the millions of Americans with student debt who have been waiting to hear how the Biden administration would act — if at all — on student loan forgiveness, the last few months have felt like years.
President Joe Biden has now finally made his decision, announcing Wednesday that he’ll cancel $10,000 per borrower and $20,000 for recipients of Pell Grants.
The relief will be limited to Americans earning under $125,000 per year, or $250,000 for married couples or heads of households. The relief is also capped at the amount of a borrower’s outstanding eligible debt, per the Education Department.
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At least 9 million borrowers could have their balances entirely cleared by Biden’s plan, according to higher education expert Mark Kantrowitz.
If we zoom out, the last few months are just a blip on what has been a more-than-decadelong push to get education debt canceled.
This is how we got here.
Occupy Wall Street demands ‘justice’ for borrowers
In September 2011, the Occupy Wall Street movement began. The protest against income inequality, the wealthy and their financial institutions, led by activists “representing 99 percent of Americans,” soon led to the Occupy Student Debt Campaign, which directed its ire at the country’s skyrocketing tuition costs and debt-fueled higher education system.
“Given its younger demographic, for many of the movement’s participants and supporters, the burden of student loan repayment was probably their most direct financial experience with the political economy they so vehemently opposed,” said Barmak Nassirian, vice president for higher education policy at Veterans Education Success, an advocacy group.
When student debt surpassed $1 trillion in April 2012, the Debt Collective, a union for debtors, called for the abolition of all student debt, in addition to the implementation of free college.
“Having people be able to access education on terms that don’t require that they mortgage their futures is good for all of us,” said Astra Taylor, co-founder of the Debt Collective and a participant in the Occupy movement.
At the time of the movement, the federal government had already implemented forgiveness opportunities for specific groups, including 2007’s Public Service Loan Forgiveness. That program allows those who worked for the government and certain nonprofits to get their debt cleared after a decade of qualifying payments.
But the protests marked the first big push for broader relief.
‘Predatory for-profit colleges’ spur forgiveness calls
In 2015, students from Corinthian Colleges, at one point the largest for-profit school chain in the U.S., went on the nation’s first student debt strike.
A U.S. Department of Education investigation into the schools found that the company falsified its public job placement rates and misrepresented information to prospective and enrolled students.
Calls to abolish all student debt resurfaced amid a myriad of legal challenges representing victims of predatory for-profit colleges, Taylor said. Debt Collective’s campaign to cancel Corinthian students’ debt garnered endorsements from attorneys general while also catching the attention and support of Sen. Elizabeth Warren, D-Mass., and 2016 Democratic presidential candidate Hillary Clinton.
All Corinthian student debt was eventually canceled in June.
“We would not be talking about student debt cancellation if it wasn’t for students from predatory for-profit colleges getting organized,” Taylor said. “We worked really hard to make clear that this isn’t just about a few bad apples. We made this about the Department of Education and the entire way we were financing education in this country.”
Nassirian at Veterans Education Success agreed that the problems in the higher education system, namely price escalation and diminishing quality, span way beyond the for-profit sector.
At around half of U.S. colleges, the majority of students go on to earn no more than high school graduates do, according to an analysis by center-left think tank Third Way that measured earning outcomes six years after college enrollment.
Even after a decade, a majority of students at nearly one-third of schools did not reach this benchmark.
“Packaging people with debt that schools knew or should have known would be unrepayable began to look predatory, regardless of where the loans were made,” Nassirian said.
Repayment troubles for federal student loan borrowers, unsurprisingly, are common. Only about half of borrowers were in repayment in 2019, according to an estimate from Kantrowitz. A quarter — or more than 10 million people — were in delinquency or default, and the rest had applied for temporary relief for struggling borrowers, including deferments or forbearances.
These grim figures led to comparisons to the 2008 mortgage crisis.
Presidential debates put forgiveness ‘at the center’
In the lead-up to the 2020 presidential election, Democratic candidates began for the first time proposing various plans that called for the broad abolition of student debt.
Warren’s plan called for the U.S. Secretary of Education to immediately cancel up to $50,000 of debt for 95% of all borrowers, in addition to reining in the for-profit college industry.
“Our country’s experiment with debt-financed education went terribly wrong: Instead of getting ahead, millions of student loan borrowers are barely treading water,” Warren said in April 2019.
Sen. Bernie Sanders, I-Vt., wanted to make two- and four-year public colleges tuition- and debt-free, and to erase all outstanding federal student debt.
Taylor said, “What you have then is suddenly debt cancellation is at the center of the presidential debate, and I think that was obviously critical, because what it did was it forced Biden’s hand.”
Biden ultimately came out in support of forgiving up to $10,000 for most borrowers.
‘We intend to keep fighting’
Taylor called the president’s announcement Wednesday “bittersweet.”
“On the one hand, this is a landmark victory for our movement,” she said. “This has never happened before in history and it provides further proof that debtors have power when we come together.”
At the same time, she said, limiting the cancellation to $20,000 could still leave millions of borrowers with unmanageable balances.
“That’s why we intend to keep fighting until all student debt is canceled and college is free,” Taylor said.