Reports have revealed that the Biden administration will extend some form of student loan relief prior to the 2022 midterm elections. The President and his advisors are said to be considering an income cap and means-testing debt relief for people who make less than $125,000.

At its core, testing student debt relief is counterproductive and obstructs what meaningful debt relief can look like.

The idea that we should not be giving even more money to wealthy people is an alluring ideology, but is not the reality of what means-testing student debt relief will achieve. Almost all borrowers make less than the $125,000 cap the President is considering - 95% of borrowers to be exact. That means over 40 million people will have to go through the hassle of navigating an under-resourced Department of Education application process.

The history of existing student loan programs underscores how ineffective application-based processes are for achieving relief for borrowers. Application-based processes like that of the Total and Permanent Discharge (TPD) program act as bureaucratic barriers that obstruct meaningful relief for borrowers who need it most. Under TPD, the Department of Ed promised to erase the debts of people whose disabilities limit their ability to work, but many eligible borrowers never completed the application process to receive that relief even after the department identified eligible borrowers and mailed them an application.

In most cases, borrowers aren’t willingly relinquishing relief. Life circumstances like homelessness, domestic abuse, or disabilities create hurdles for those who would most benefit from student debt relief. Other hurdles come from the Department of Ed, which lacks the ability to retain income information for borrowers outside of an application process. An application-based process for student loan relief is likely to overwhelm department call centers, which now have reduced staff since the moratorium started.

95% of borrowers will have to overcome a number of obstacles to achieve debt cancellation due to the persistent myth that wealthy people will benefit from student debt relief when in reality, wealthy people don’t need student loans. Broad-based and immediate student loan relief will benefit those who need it the most, help narrow the racial wealth gap, bring direct assistance to over 40 million people, and avoid a costly and inefficient administrative nightmare that is sure to follow any debt relief application rollout.  

Sign the petition to President Biden: No barriers to student debt relief

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Americans for Financial Reform
Better Organizing to Win Legalization
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Civic Action
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