The Biden administration used a COVID-justified waiver to quietly transform a small student loan forgiveness program into an enormous scheme which can write off unlimited amounts of student loans for government workers and employees of nonprofits including activist think-tanks.
The average debt forgiven under the waivers was $60,000, and between October 2021 and June, the education debts of nearly 150,000 government and nonprofit workers, totaling $9 billion, were forgiven. The program was already a giveaway to the Washington swamp and teachers unions, according to Lindsey Burke, director of the Heritage Foundation’s Center for Education Policy.
“Public service loan forgiveness prioritizes government work over private sector work and making the program more generous is just one more way the Biden administration is encouraging tuition inflation in the future,” Burke told The Daily Wire.
The waiver, which the administration justified by citing the COVID pandemic, created so many loopholes in the program’s enforcement that the $9 billion payout in eight months dwarfed the $1.2 billion in loans forgiven over the prior five years combined, a Daily Wire review of Department of Education data shows.
Public school teachers unions back Biden and supported school shutdowns that some say led to plummeting academic performance of children. But employees of nonprofits are also eligible, including activist think-tanks. Liberal advocacy groups like Center for American Progress and Planned Parenthood, for example, are specifically approved. Well-funded universities like Yale and Harvard are also included.
The Public Service Loan Forgiveness Program can discharge all of a person’s student loan debt after 10 years of working for the government or a nonprofit, assuming they meet various rules, which previously included doing a good job making their payments in the first 10 years.
In October 2021, the Biden administration announced a “change to PSLF program rules for a limited time as a result of the COVID-19 national emergency.” It is still in effect through October 31. The change amounted to no longer enforcing many eligibility criteria for the loans.
The move is separate from the better-known plan to forgive $10,000 in student loans for all borrowers with incomes less than $125,000. Some invoked teachers as an example of why that universal forgiveness was necessary, without acknowledging that the existing government program already forgave even larger amounts for teachers.
The average amount discharged under PSLF without a waiver was $97,000, while the average discharged under waivers was $61,000, according to the most recent data provided by the Department. People working in eligible positions currently have $133 billion in loans, averaging $100,000 each. If the total amount ultimately forgiven is similar to those in past groups, much of that stands to be forgiven.
On Tuesday, the Department of Education boasted about the results of its change, saying “it has approved more than $10 billion in debt relief for over 175,000 borrowers in 10 months through the Public Service Loan Forgiveness (PSLF) program. This follows changes the Department announced in October 2021 that transformed the program by changing certain rules to make it easier for public servants with federal student loans to have their debts cancelled.”
It said under the relaxed rules, the “typical borrower receiv[ed] more than a year’s worth” of credits towards the 10 years. “Federal student loan borrowers who are eligible can receive credit for payments that would otherwise not qualify for the program.”
The Department of Education did not answer a question from The Daily Wire about how the COVID emergency affected workers’ ability to pay loans in late 2022, even though almost no one is currently unable to work because of COVID. But in July 2021, the Department proposed a rule that would make the changes permanent, suggesting that COVID was not its motivation. That rule is still pending.
Burke said expanding a federal program’s expenditures to such magnitude while citing a “waiver” is another example of Biden pushing the boundaries of his authority. “The sheer size and scope… suggests it’s akin to a substantive rule, and under the Administrative Procedure Act (APA), such rules must go through a period of public notice and comment before they can be implemented, putting all of it on questionable legal footing,” she said.