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How schools fit into Biden’s infrastructure push

How schools fit into Biden’s infrastructure push


Michael Stratford

March 29, 2021

EDUCATION DEPARTMENT READIES STUDENT LOAN ACTIONS: The Biden administration this week is planning to roll out several student debt actions, according to several Education Department officials familiar with the plans.

— Total and permanent disability discharges: The Education Department is preparing to waive some of the paperwork requirements for borrowers who receive discharges because of their “total and permanent” disability, officials said. The department is expected to ease some of the bureaucracy surrounding how disabled borrowers must continue to prove they have a low income for the three years after their loan is discharged or else have their loans reinstated. Some consumer and disability advocates have called for eliminating that monitoring period altogether and automatically wiping out the debt.

— Flashback: Former President Donald Trump automatically canceled the debts of disabled veterans who qualified for those discharges in 2019. But the Education Department has so far resisted bipartisan calls to automate the loan discharges for hundreds of thousands of other severely disabled borrowers whom it has identified using Social Security Administration data.

— Expanding pandemic relief to excluded borrowers: The Biden administration is also planning this week to halt the collection of defaulted student loans that are guaranteed by the federal government but held by the private sector, officials said. Those borrowers have been excluded from the federal government’s pandemic relief, which applies only to loans held directly by the Education Department. The new relief is expected to apply only to borrowers who have defaulted on their debt, not the entire group of about 6 million borrowers with federally backed loans who aren’t covered by the existing pandemic relief.

— A department official described the executive actions as a way to provide “targeted relief” to borrowers amid the pandemic. “This is the start and far from the end of what we plan to do,” the official said.

— Key context: The announcements come as the White House weighs how to respond to progressive demands to cancel large swaths of outstanding federal student loan debt, as well as some complaints from progressives that the Biden administration is not moving quickly enough on student loan issues. The department recently announced it was scrapping the Trump administration’s partial loan forgiveness policy for defrauded borrowers and planned to discharge $1 billion of debt owed by about 72,000 borrowers who were misled by Corinthian Colleges and ITT Tech.

— Also on the horizon: The Education Department is preparing to dole out some of the billions of dollars earmarked for colleges and universities that was included in Biden’s Covid relief law in the coming weeks.

— “Support for students, borrowers, and postsecondary institutions is critically important, especially as the COVID-19 national emergency exacerbates the existing inequities in our education system,” Education Secretary Miguel Cardona said in a statement to Morning Education. “Additionally, it is crucial that student loans help finance a path to opportunity, not become a lifelong burden. We are committed to college affordability and will continue to address the issue of student loan debt.”

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