We Did it: How Biden’s ‘targeted’ student loan relief stacks up — Cardona back in the hot seat this week — GOP bill targets D.C. schools over critical race theory

Jun 21, 2021

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STUDENT LOAN PRESSURES: The Biden administration has been grappling for months over whether to accede to progressive demands to cancel large swaths federal student loan debt. And more immediately, the White House and Education Department are debating if pandemic relief for 40 million student loan borrowers should be extended beyond October.

Miguel Cardona

Secretary of Education Miguel Cardona speaks during the daily press briefing at the White House on March 17, 2021 in Washington, D.C. | Drew Angerer/Getty Images

As the administration weighs those major decisions, Education Department officials have said they're focused on improving the existing debt cancellation programs targeted at certain populations of borrowers: those who have become severely disabled or were defrauded by their college, and public service workers.

A new trove of federal data sheds some light on how the Biden administration is approaching debt relief for these students:

PUBLIC SERVICE LOAN FORGIVENESS: In 2007, Congress created a program meant to wipe out federal student loan debt for borrowers who pay their loans for 10 years while working in public service. But it's been plagued by problems in recent years.

— What Trump did: The first cohort of borrowers became eligible for forgiveness during the Trump administration, which had by then repeatedly proposed eliminating the program. The Education Department rejected the vast majority of the hundreds of thousands of borrowers who applied for loan forgiveness. By roughly the end of the Trump era, approximately 6,000 borrowers had their student loans forgiven.

— Biden's record so far: Fewer than 2,500 borrowers received loan forgiveness between the end of Nov. 2020 and April 2021 — the final months of the Trump administration and first few months of the Biden administration. (It's impossible to determine precisely how many borrowers applied for loan forgiveness and were rejected during that time because of the new way the data is reported.)

And the new data shows a sizable paperwork backlog at the Education Department; nearly 130,000 borrowers who applied for loan forgiveness or requested an update on their progress toward loan forgiveness were still waiting for answers at the end of April. The data also indicates that 1.25 million borrowers have taken some step to participate in the program since 2012 and have not yet obtained loan forgiveness.

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— What's next: The Biden administration plans to revise the regulations governing public service loan forgiveness, though it hasn't said how exactly it plans to change them. At the same time, the administration is also facing pressure from unions to automatically cancel the debts of borrowers who have been working in public service for at least 10 years, regardless of whether they meet the program's other criteria.

TOTAL AND PERMANENT DISABILITY DISCHARGES: Federal law allows student borrowers who have a "total and permanent" disability to have their student loans forgiven. But there's been bipartisan concern in recent years that the process is overly burdensome.

— What Trump did: The Trump administration automatically wiped clear the student debts of about 25,000 veterans with severe disabilities, and wrote a regulation that allows for automatic relief for veterans going forward. That relief applied only to veterans who became severely disabled.

— Biden's record so far: The Biden administration announced that it would waive some paperwork requirements for severely disabled borrowers seeking relief during the coronavirus pandemic. The Education Department also permanently erased the debts of more than 41,000 borrowers whose loans were reinstated because they failed to submit paperwork proving their income.

New data obtained via a Freedom of Information Act request by the advocacy group Student Defense this month shows that the agency knows that an additional 517,000 borrowers qualify for the disability loan discharge but have not yet received it. Student Defense Vice President and co-founder Alex Elson said that even though the department knows these disabled borrowers "are legally entitled to full discharges of their student loans," the department "is only providing relief to those who figure out how to jump through unnecessary hoops."

Student Defense has joined with other consumer organizations and a bipartisan group of lawmakers to urge the department to swiftly cancel the debt. This morning, Student Defense is also asking the Education Department to confirm the accuracy of the data and the agency's progress on the issue.

— What's next: The Biden administration has said it plans to revise the rules surrounding "total and permanent" disability discharges as part of its higher education rulemaking agenda.

BORROWER DEFENSE REPAYMENTS: Federal student borrowers who are defrauded by their college can apply to have their debt forgiven. The Obama administration first popularized this relief program after the collapse of large for-profit colleges.

— What Trump did: The Education Department stopped issuing decisions on "borrower defense" claims for more than 18 months and issued tens of thousands of denials in the waning weeks of his administration, some of which are now being challenged in court. DeVos also sought to reduce the costs of loan forgiveness to taxpayers by doling out only partial relief to some borrowers.

— Biden's record so far: In the first three months of the Biden administration, the Education Department approved more than 33,000 borrower defense claims. During that same time, another 22,572 applications were added to the backlog, which is now nearly 108,000 pending claims. The Biden administration last week announced that it was canceling the loans of about 18,000 former ITT Tech students (out of about 34,000 claims), and the Education Department has scrapped DeVos' partial relief policy.

— What's next: The Biden administration has said it plans to restore Obama-era standards that make it easier for students to bring claims. But it hasn't publicly outlined a plan for processing the backlog of existing claims.

BORROWERS EXCLUDED FROM PANDEMIC RELIEF: The federal government has paused monthly payments and interest for about 40 million federal student loan borrowers since March 2020. But the policy has excluded millions of people who have federally-backed loans owned by private companies.

— What Trump did: The Education Department twice extended the pandemic relief for student loan borrowers without covering any additional borrowers. Bipartisan calls in Congress for parity between the two types of federal student loan borrowers also went nowhere in 2020.

— Biden's record so far: The Education Department has expanded pandemic relief to a subset of the excluded borrowers: about 1 million borrowers of federally-guaranteed loans who defaulted on their debt as of May 12, 2021. But about 5 million additional borrowers who haven't defaulted still don't qualify.

— What's next: Education Department officials said earlier this year they're examining whether they have the authority to further expand relief.

IT'S MONDAY, JUNE 21. WELCOME TO MORNING EDUCATION. Please send tips to your host at mstratford@politico.com or to my colleagues, Juan Perez Jr. at jperez@politico.com, and Bianca Quilantan at bquilantan@politico.com. Follow us on Twitter: @Morning_Edu and @POLITICOPro.

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DRIVING THE WEEK

House of Representatives

In this image from video, members of the House stand on the floor of the House of Representatives at the U.S. Capitol in Washington, D.C., on March 27, 2020. | House Television via AP

ON THE HILL THIS WEEK: Education Secretary Miguel Cardona will be back in the hot seat on Thursday, testifying before the House education committee. It's the committee's first oversight hearing focused on the Education Department during the Biden administration.

— Earlier in the week, on Tuesday, the committee's higher education subcommittee will hold a hearing on ways to boost federal workforce training programs to help people leaving prison find jobs.

Student Loans

HUD MAKES IT EASIER FOR STUDENT BORROWERS TO MORTGAGES: The Biden administration is tweaking how the Federal Housing Administration calculates eligibility for government mortgage assistance for applicants with student loan debt. The changes, HUD Secretary Marcia Fudge said in a statement , will "make it easier for borrowers with student loan debt to qualify for a federally insured mortgage" and help reduce racial gaps in homeownership.

In Congress

GOP BILL TARGETS D.C. SCHOOLS OVER CRITICAL RACE THEORY: Rep. Glenn Grothman (R-Wisc.), a member of the House education committee, on Friday opened a new front in the GOP's fight against critical race theory, an academic concept that examines how systemic racism has been woven into statutes and policies throughout U.S. history.

— Grothman introduced legislation that would prohibit D.C. public schools, including charter schools, from teaching "ideas that promote race or sex stereotyping or scapegoating," including the notion that the U.S. is "fundamentally racist or sexist."

— Other Republican efforts in Congress have sought to block the Education Department from encouraging schools to teach critical race theory. But the bill targeting D.C. schools, which stands virtually no chance of passing in the Democratic-controlled Congress, is new.

— The official D.C. Council Twitter account responded: "Actually, here in DC, we teach Critical *State* Theory: We are deeply Critical of people elsewhere telling us how to educate our own children in our own soon-to-be State. How can they be so presumptuous?"

Education Department

CARDONA DISCUSSES TRANSGENDER STUDENT RIGHTS WITH COUSIN: Cardona speaks with his cousin, Alex, about the experience of being a transgender college student in a new video posted by the Education Department. "I didn't transition to be seen as a transgender man," Alex says in the video . "I transitioned to be me."

— Cardona announced last week that the Education Department would now be interpreting Title IX to protect transgender students. The Biden administration also backed a legal challenge to a new West Virginia law that prohibits transgender girls from playing on women's sports teams in school.

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Syllabus

— Wisconsin Gov. Tony Evers vetoes bill increasing eligibility for school voucher program: The Associated Press.

— Foreign tech workers are getting fed up. Can better education for U.S. students fill the gap? The Hechinger Report.

— Judge gives District of Columbia 15 days to provide incarcerated students with their legally mandated special-education services: The Washington Post.

— Virus surge claims brightest minds at Indian universities: The Associated Press.

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