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President Joe Biden has just taken another broad swipe at student debt, recently announcing an array of policies that will reduce or eliminate student debt for millions of borrowers. Spreading the word at three separate events on April 8, Biden, Vice President Kamala Harris and Education Secretary Miguel Cardona sat down with AFT members and others in Wisconsin, Pennsylvania and New York to listen to their student debt stories and describe a new set of pathbreaking plans for relieving billions more in student debt for tens of millions more borrowers around the country.
Among other provisions, the plans put a stop to interest that gets so high it surpasses the original loan amount, and they eliminate student debt for those who have been paying for 20 years or more. This effort represents more than post-pandemic relief; it is a real solution to revive economic and educational opportunity. It brings the total number of borrowers receiving relief to 30 million.
“This relief can be life-changing,” said Biden at an event in Wisconsin, describing how in the past, borrowers have delayed having families, starting businesses and pursuing the careers they love because student debt weighed them down. Biden has been committed to changing that for years—so, despite the fact that the Supreme Court struck down his initial student debt relief plan last year, he has come up with alternatives based on federal policy changes.
“I’ll never stop delivering student debt relief to hardworking Americans,” he said, adding that relief works both for individuals and for the country at large. “It’s for the good of our economy,” he said, and it’s “freeing millions of Americans … [so] they can finally get on with their lives.”
There was dancing
“When I received the congratulations letter in May of 2023 that my loans had been forgiven, it was one of the best days of my life,” said Tonya Cabeza, a Philadelphia elementary school teacher leader and member of the Philadelphia Federation of Teachers. Cabeza, who attended the Philadelphia event featuring Kamala Harris, thought she would be paying off her loans until she died, but now that her $40,000 debt is “just gone,” she can help her daughter begin her college career. “I wish you could have seen it,” she said of the moment she learned her debt was discharged. “There was dancing. We knew that things were changing for us.”
Another AFT member, Picolya McCall, a Los Angeles community college adjunct and member of the Los Angeles College Faculty Guild, Local 1521, was just as thrilled. “Thanks to President Biden’s new SAVE program, my monthly payments are down to zero dollars per month,” she said. “As a single mom of two small children, this program is the lifeline that I needed to stick with my passion for public service and still take care of my family!” You can read more about McCall’s student debt journey on AFT Voices.
“This is a life-changing intervention,” said AFT President Randi Weingarten. “Student debt has become a stranglehold on economic opportunity for this generation of strivers and dreamers. The Biden-Harris administration is pursuing mechanisms to remove the shackles of student debt for millions more Americans because they are determined to improve people’s lives. While loan servicers and extremists in Congress and the courts throw up barriers, Joe Biden and Kamala Harris have shown in deeds, not just words, that they have our backs.”
Economics and teacher retention
Weingarten pointed out that erasing student debt is not just a “moral obligation” but also an “economic imperative.” “It will turbocharge the economy and remove the psychological burden for those who only want to get ahead but instead find themselves ensnared in a never-ending cycle of debt and distress.
“These plans are an investment in our country’s continued economic rebound and in making affordable, accessible higher education a reality, rather than a pipedream, for generations to come,” she said.
At a roundtable discussion with Cardona and members of the United Federation of Teachers in New York, speakers talked about the relief they felt when their student debt was canceled, and how additional ways to cancel student debt will help with the challenges of recruiting and retaining educators. In Philadelphia, Kamala Harris also referenced the need to keep those jobs filled. Praising the group of public service workers who had assembled—a teacher, a school nurse and a social worker among them—she recognized the sacrifice and dedication it takes to serve the community.
“We want you to stay in these jobs doing this work,” she said. “We need you to stay in these jobs.” Student loan relief, she pointed out, benefits the individual borrower, but it also benefits the communities where they work by helping them stay in jobs they love.
The new plans will waive accrued and capitalized interest for millions of borrowers; automatically discharge debt for borrowers who are otherwise eligible for loan forgiveness under the Saving on a Valuable Education plan (known as SAVE), the closed school loan discharge program or other forgiveness programs but are not enrolled; eliminate student debt for borrowers in repayment for two decades or more; help borrowers enrolled in low-financial-value programs or institutions; and assist borrowers experiencing hardship.
Prior to the April 8 announcement, the administration had already announced $146 billion in approved student debt relief for 4 million borrowers.
[AFT Communications staff]