Democrats are urging Biden to cancel student debt for thousands of borrowers before Trump takes office
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- Democratic lawmakers urged Biden to cancel student debt for defrauded borrowers before Trump takes office.
- Some borrower defense applications are still pending, and lawmakers are pushing for prompt relief.
- Biden has canceled student debt for over 1 million borrowers defrauded by their schools.
A group of Democratic lawmakers want President Joe Biden to quickly process student-debt cancellation applications for thousands of borrowers before it's too late.
On Wednesday, 75 Democratic lawmakers, led by Sens. Dick Durbin and Ed Markey and Rep. Maxine Waters, sent a letter to Education Sec. Miguel Cardona urging him to discharge unprocessed borrower defense applications, which are applications student-loan borrowers can submit if they believe they were defrauded by the school they attended. If approved, the loans they took out to attend that school would be discharged.
With President-elect Donald Trump taking office in under two months, the lawmakers said debt relief would become a lot more uncertain under his leadership.
"We're here today to demand that the Department of Education deliver on President Biden's commitment to debt relief and process all outstanding borrower defense relier before President Trump slams the door shut on borrowers on January 20," Markey said during a Wednesday press conference. "Borrowers who attended fraudulent schools and have struggled with debt for years or even decades cannot afford to wait any longer."
The lawmakers urged Biden during their press conference to cancel the loans of borrowers who applied for borrower defense in the next 50 days. In their letter, they added that the relief should include the thousands of borrowers already approved for relief who are still waiting for their balances to be wiped out. The lawmakers also wrote that the department should use its authority to enact group discharges for borrowers who attended schools "with documented histories of predatory practices," along with processing any remaining applications.
Democratic Rep. Bobby Scott also urged the Education Department in late November to approve student-debt relief applications not just for borrower defense but for Public Service Loan Forgiveness. During his first term, Trump proposed eliminating the program, which cancels any remaining debt for public sector workers after 10 years of qualifying payments.
An Education Department spokesperson told Business Insider that the department "remains committed to getting borrowers whose colleges took advantage of them all the relief they are entitled without further action on their part."
The spokesperson said that the department paused payments for borrowers with approved discharges and recommended that borrowers with questions on the status of their applications call the borrower defense hotline at 1-855-279-6207.
Biden's Education Department has canceled student debt for nearly 5 million borrowers over the past years, including $28.7 billion for over 1.6 million borrowers who were defrauded by their schools. However, thousands of borrowers are still waiting for their borrower defense applications to be processed, and time is running out.
Durbin said on the Senate floor on Monday that it's "critical" Biden discharge those borrowers' loans "as quickly as possible" because, under Trump's first term, his Education Department ran up a backlog of borrower defense claims, leaving impacted borrowers waiting years for relief.
"History shows that a second Trump Administration is likely to do everything in its power to prevent these students from receiving relief again," Durbin said on Monday. "But our nation's students, who are simply trying to better their lives deserve better."
Trump has not yet provided details on how he will approach student-loan forgiveness. However, some higher education experts previously told Business Insider that relief would likely not be his priority. Preston Cooper, a senior fellow at the conservative-leaning American Enterprise Institute, said that Trump would likely "take a bit more of a skeptical attitude" with borrower defense applications because the Education Department can determine if a borrower qualifies.
"If it's a loan cancellation program that leaves a lot more discretion up to the Department of Education, we could certainly see some major swings in policy," Cooper said.