Student debt relief finally in sight

After months of anticipation, the Biden administration has announced its biggest student debt relief plan thus far. On Aug. 24 President Joe Biden unveiled a plan to cancel $10,000 of federal student debt for individuals who earn less than $125,000 a year ($250,000 for a couple filing taxes jointly) and up to $20,000 for low-income borrowers who received Pell grants. In addition, the student loan payment pause implemented at the beginning of the pandemic will be extended past its Aug. 31 deadline to Dec. 31. Thousands of AFT members, and millions of Americans, will be affected.

The relief will not be automatic for everyone; those not already enrolled in an income-based repayment plan must apply through a process expected to be in place by the end of the year. Meanwhile, all borrowers are advised to be sure their student loan servicers have their current contact information, and to keep an eye out for any correspondence or changes in their student loan accounts. More details are available on the federal student aid website.

A long road to relief

For years the AFT has advocated for student debt relief for individual members with student debt clinics, online guidance and access to loan relief assistance through Summer, a free online student loan management platform. In this way, AFT members have saved hundreds of thousands of dollars. AFT members can still sign up for weekly student debt webinars or get advice from Summer.

The union has also worked on the issue more broadly by pressing the administration to cancel as much debt as possible. We advocated for more access to Public Service Loan Forgiveness—the program that cancels student debt for public service workers who make 10 years’ worth of student loan payments—and helped win a waiver of strict PSLF requirements so that more people qualify for the program. Thousands of AFT members and others have benefited from that change, and thousands more are expected to take advantage of the waiver, which expires Oct. 31. We also helped win global changes to the PSLF system, in part through the Weingarten v. DeVos lawsuit against former Education Secretary Betsy DeVos; the suit accused her of making PSLF so complicated and poorly organized that just 2 percent of those who applied were granted relief.

And, the union helped pass the borrower defense rule, which cancels student debt for people who attended colleges that failed to provide the education they promised—and left borrowers with piles of debt but no skills to qualify for jobs that would help them pay it off.

All these changes affected hundreds of thousands of borrowers. But the newest announcement could ease student debt for the vast majority of 46 million borrowers, 90 percent of whom earn less than $75,000 a year.

“Today, millions of Americans can breathe easier knowing that some of the crushing burden of student loan debt has been lifted,” says AFT President Randi Weingarten. “Make no mistake—this is a transformative action that will change countless lives. … The extra consideration for Pell recipients is especially welcome because it focuses like a laser on people in need.”

Student debt has not only dragged down individuals who are so overwhelmed by monthly payments that they are unable to start families, purchase homes, or send their own children to college. It disproportionately affects Black people, who carry an average of $25,000 more in debt than their white colleagues—so it perpetuates inequity. It’s also affected the economy by suppressing purchasing power and preventing people from achieving the stability they need to contribute to society. 

“This administration’s decisions have been a game-changer, but now we need to build on its progress and get the word out,” says Weingarten. “Extending the [loan payment] pause is crucial for borrowers still struggling in the aftermath of COVID-19—and we are asking that the PSLF waiver be extended, too.

“This is a day for celebration, and tomorrow, with surer footing, we will redouble our efforts to remove this scourge that disproportionately and indiscriminately hurts the most vulnerable.”

AFT members who want to learn more about their own student loan possibilities can attend one of the union’s weekly student debt clinics, or sign up for advice on Summer, a free benefit for AFT members.

[Virginia Myers]