This is it.
More than a year after President Joe Biden first tried to make good on a campaign promise to cancel student loan debt, the final contours of his second attempt should become clear this week.
Biden’s original plan for large-scale student loan forgiveness was undone by the Supreme Court in June. It would have canceled up to $20,000 in loan debt and affected as many as 40 million people, or almost every person with federal student loans nationwide.
After the ruling, Biden said he would employ a committee of stakeholders from higher education, loan servicers and borrowers among them, who would use a process called negotiated rulemaking, or neg reg, to draft a new plan for loan forgiveness.
The committee has met several times already, but its final round of talks began on Monday and will continue through Tuesday.
Frustrations arose almost immediately. Committee members expressed disappointment in the department's latest forgiveness proposal, released last week, which many said doesn't go far enough in its current form to address the issues they've spent months debating.
“Something about this negotiation process has taken a turn," said Jalil Bishop, a negotiator representing borrowers who took out loans for graduate programs.
Sherrie Gammage, who represents graduates of four-year programs, echoed those concerns.
“Has this committee, and the work that they’ve done, and the discussions we’ve had, had any meaning at all?” she asked.
By the end of the negotiations, the group has to sort out which student loan forgiveness ideas it can get behind unanimously, though total agreement has been unlikely from the start. Then, the Education Department has to write a version for the public to react to, a plan the agency has said will be guided by any proposals everyone on the committee agrees upon, which is called consensus.
As the nitty-gritty of policymaking has dragged on, Biden finds himself in hot political waters – and the criticism is coming from all sides. On the left, Senate Democrats have called this fall's return to loan repayment an “unprecedented event with a high risk of harm to borrowers.” Republicans in the House and Senate have made no secret of their stance that any form of student debt relief is unfair to Americans who paid off their loans or never went to college.
To top it all off, the Education Department likely won't land on a final proposal until about the middle of next year, just ahead of the presidential election.
Another student loan forgiveness plan: It could be excruciatingly long
Here are three takeaways from Monday's meeting
Last week, in a much-anticipated preview into the agency’s thinking, the Education Department released an outline of how it will approach its second try on relief.
Based on the reaction from many of the committee members, a gaping distance remains between how far they hoped to take a new debt relief strategy – and how far the Biden administration is willing to go with a backup plan.
Here are three takeaways from Monday's meeting:
Progressives in Congress weighed in. Sen. Elizabeth Warren, D-Mass., and Rep. Ayanna Pressley, D-Mass., showed up to the meeting to push the department to go bolder. They and other congressional Democrats penned a letter to Education Secretary Miguel Cardona on Monday morning arguing the relief "would fall far short of providing the full scale of debt relief that low- and middle-income Americans urgently need." Read the six fixes they recommended.
One sticking point: capped forgiveness. The department has endorsed forgiving debt for many borrowers whose loans have swelled past their original amount. But that relief has limits, a contingency that emerged as a point of contention. “Capping relief from runaway interest at $10,000 or $20,000 ties the secretary's hands unnecessarily," Warren told the committee.
Is the Education Department negotiating in 'good faith'? The panel has spent the last several sessions trying to define what types of "hardships," such as chronic illness or bankruptcy, create circumstances that keep borrowers from paying back their loans. But the department hasn't revealed how far it's willing to go to answer that question. The silence has left some negotiators irked. "We’re all screaming into the void here," said John Whitelaw, a negotiator representing borrowers with disabilities.
Older loans, those with runaway interest are Biden’s target for forgiveness
In the draft proposal published last week, the department suggested forgiving outstanding balances entirely for borrowers who’ve been paying their loans back for at least two decades.
Also included: forgiveness for borrowers whose loans have swelled due to interest. The administration offered to cancel up to $20,000 in interest-driven debt for borrowers who make less than $125,000 as a single individual or $250,000 for households.
Borrowers who don’t meet those standards, however, could still be eligible for some other forms of targeted relief.
Would you qualify for debt forgiveness? Find more details about the Education Department's latest plan.
What about other borrowers?
But what should the panel do about everyone else? Are there other types of borrowers who deserve to have their debt relieved?
That’s the big outstanding question the committee will try to wrestle with this week. It boils down to one word – “hardship” – and exactly how the Education Department chooses to define it.
USA TODAY first reported Friday that researchers with the University of California’s Student Loan Law Initiative will push the negotiators during the Tuesday session to consider using six indicators of financial stress – credit scores, outstanding mortgage balances, and progress toward paying down car loans, to name a few – as a shorthand for the kinds of life challenges that push borrowers into yearslong defaults.
Researchers to Biden student loan panel: Cancel student loan debt for households with income under $71K
As conservatives push back, Biden wants political credit for debt relief
Last week offered a useful demonstration of the complicated politics of student loan forgiveness.
On Thursday, House Republicans passed a resolution opposing Biden’s new income-driven repayment plan, called Saving on a Valuable Education, or SAVE. Conservatives in Congress denounced it as a “free college scheme,” a typical line of attack. The Senate, however, narrowly struck down the same measure in November, thanks to moderates like Arizona’s Independent senator, Kyrsten Sinema, and Democrat Jon Tester of Montana, sticking with Biden.
While the future of student loan relief is far from certain, Biden has made a clear political calculation: putting money back in voters’ pockets will bolster his chances at reelection. It's a drum the White House hasn’t shied away from beating.
A day before the House GOP voted to condemn Biden's SAVE plan, Education Secretary Miguel Cardona was touting nearly $5 billion in additional debt relief that the agency doled out to longtime borrowers.
And two weeks ago, Biden started sending personalized emails to hundreds of thousands of borrowers who’ve already started receiving relief after the Education Department took a second look at their repayment timelines. The adjustment immediately wiped balances clean for many older borrowers who’d been paying down their loans for decades.
“Congratulations – your student loan has been forgiven because of actions my Administration took to make sure you receive the relief you earned and deserve,” Biden wrote in the email.
Meanwhile, his second big swing on student loans, via committee, is moving along in the background.
Who is on the committee
The student loan panel has 16 members and 16 alternates, and federal facilitators help run the meetings. The negotiators come from all sides of the student loan debate, from servicers to borrowers. Private, public and for-profit colleges are represented, as are historically black colleges and universities, or HBCUs, plus tribal colleges and other forms of minority-serving institutions.
Find a full list of the negotiators at this link.
How to watch the final session of Biden’s student loan panel
The sessions on Monday and Tuesday run from 10 a.m. to noon Eastern time, then 1 p.m. to 4 p.m. Eastern, and will be livestreamed. Register at this link to get the livestream information. Catch up with documents and recordings you’ll find on this page from past meetings.
Sharing your thoughts about debt forgiveness
At the end of the first day of the final talks, the public can weigh in during the last hour of discussion. To request time to comment, send your name and any group you’re affiliated with to email@example.com by noon Eastern time. Unlike past sessions, there won’t be public comment on the second day.
Once the Education Department finalizes a proposal, there will be another opportunity for the public to share their thoughts. The agency recently said it may not have a proposal until May 2024.
Next steps: Is more relief on the way?
When the Supreme Court struck down Biden’s original plan over the summer, it ruled student loan debt relief could not be granted using the president’s executive authorities. That means the only viable routes are through congressional legislation – which, given partisan gridlock, is all but impossible – or through changes to federal higher education policy.
If a rule isn’t finalized by the Education Department, and a Republican wins next year’s presidential election, the chances of broad student loan forgiveness becoming reality will be slim.
Zachary Schermele is a breaking news and education reporter for USA TODAY. You can reach him by email at firstname.lastname@example.org. Follow him on X at @ZachSchermele.
This article originally appeared on USA TODAY: Cancelling student debt: Biden's loan relief panel meets for last time