Warren, Merkley Release New Report on Biden-Harris Student Debt Relief: Who Really Benefits from Student Debt Cancellation?

New rule will disproportionately help low- and middle-income borrowers, seniors, women, and Black borrowers.

Text of Report (PDF)

Washington DC - Today, U.S. Senators Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) released a new 29-page report, Who Really Benefits from Student Debt Cancellation?, examining the impact of the Biden-Harris administration’s new Ley de Educación Superior rule, proposed in April 2024, to cancel student loan debt for 24 million students by the end of this year. The report finds that low- and middle-income borrowers, seniors, women, and Black borrowers will receive enormous benefits from the new rule.

“Ten of millions of borrowers will benefit from the Biden-Harris Administration’s new student debt relief rule,” the report states. “This new rule will help low- and middle-income families and the economy as a whole—freeing up borrowers from crushing debt and empowering them to buy homes, start new businesses, and invest in themselves and their families.”

After President Biden’s first plan to cancel up to $20,000 of student loan debt for borrowers was blocked by a coalition of Supreme Court Justices appointed by former President Donald Trump and in the face of ongoing legal challenges to the Saving on a Valuable Education (SAVE) Plan, the Biden-Harris Administration announced that it would fix existing debt relief programs and use its existing authority to promulgate a new rule under the Ley de Educación Superior to ensure 30 million borrowers receive relief by the end of this year. This rule is expected to provide relief to 24 million borrowers by targeting: 

• Borrowers who have balances larger than what they originally borrowed. 
• Borrowers who have been repaying their loans for over 20 years. 
• Borrowers who are eligible for existing relief but have been unable to successfully apply. 
• Borrowers who enrolled in low-financial-value programs or institutions. 

A future rule will provide relief for borrowers experiencing financial hardship.

The report details that four groups in particular would receive significant relief under the Biden-Harris Administration’s new rule:

• Low- and Middle-Income Borrowers: The majority of student debt is held by families with zero or negative net worth. The rule provides targeted relief to several groups of borrowers who are disproportionately low- and middle-income, including those whose balances have risen above what they initially borrowed, those who have been in repayment for over 20 years, those who attended “low-financial-value” programs, and those experiencing financial hardship. 
• Seniors: Over nine million student loan borrowers are more than 50 years old, and nearly 60% of borrowers over the age of 60 have been in repayment for over 15 years. The rule will provide relief to over 5 million borrowers over the age of 50 whose balances exceed their original loan amounts and 1.5 million who have been in repayment for over 20 years.
• Black Borrowers: Black borrowers owe an average of $25,000 more in student loan debt than white borrowers, have the highest monthly payments among all racial groups, and are the most likely of any racial group to delay buying a home due to their student loan debt. The rule will provide relief to about 6 million Black borrowers whose balances exceed their original loan amounts.
• Women: Women hold almost two-thirds of all student loan debt, are more likely to hold higher debt balances than their male counterparts, and face lower average incomes across all age groups after graduating. As a result, relief targeted towards borrowers experiencing financial hardship will likely disproportionately benefit women.

“For decades, students have worked hard and played by the rules, taking on loans with the promise that a college education would be a ticket to the middle class. Instead of getting ahead, millions of student loan borrowers are barely treading water,” dijo el senador Warren. “Our report makes clear who the Biden-Harris administration is fighting for: working people who simply want a fair shot at the American dream.”

“I was the first in my family to attend college, and I know the power that education has to open the doors of opportunity for those who work hard,” dijo el senador Merkley. “America’s students should be able to access higher education without the fear of being crushed by a lifetime of debt. This report highlights the urgent need to deliver relief for 24 million student borrowers and build a path toward fulfilling the promise of higher education for all students.” 

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