What Biden’s annual budget means for the future of student loan forgiveness


President Joe Biden on Friday unveiled his $6 trillion budget request for the 2022 fiscal year. The proposal primarily covers programs that have already been on the table, like improving U.S. infrastructure, and leaves out several of Biden’s large-scale campaign proposals — including student loan forgiveness.

On the campaign trail, Biden suggested that he would like to cancel $10,000 in student loan debt per federal borrower, and he has been vocal about the burden of student debt. However, with this new budget proposal, experts now question whether student loan forgiveness is possible in the near future.

$10,000 student loan forgiveness looks less likely

Biden leaving forgiveness out of the budget isn’t an indication that he won’t forgive student loans, but it is an indication that student loan forgiveness isn’t an immediate priority.

While forgiveness through Congress is still possible, Biden would face congressional gridlock, with the issue split along party lines and even some Democrats divided on if or how much student debt should be forgiven.

Biden could instead pursue executive action to cancel student debt, but that too is still in question. Education Secretary Miguel Cardona is overseeing a legal review of Biden’s authority to cancel debt, but the administration has been silent on the issue since early April. This, coupled with the budget proposal, could indicate that the sweeping student loan forgiveness measures proposed during Biden’s campaign are off the table for now.

The budget could make higher education cheaper in other ways

Though student loan forgiveness isn’t included in the budget, the document does include funding for the higher education plans detailed in Biden’s American Families Plan. Included in the budget are plans to implement two years of free community college and invest in making college more affordable for students attending historically Black colleges and universities (HBCUs), tribal colleges and universities (TCUs) and minority-serving institutions (MSIs).

Another big proposal is an increase to the maximum Pell Grant amount by $1,875 — granting the $1,475 increase included in the American Families Plan, plus an additional $400 increase through the budget itself. This would mark the largest one-time increase in the grant’s history and “represents a significant first step to deliver on the president’s goal to double the grant.”

Smaller-scale proposals are more likely to become policy

Many student loan borrowers have been banking on the possibility of student loan forgiveness. However, even as Biden’s largest forgiveness proposals remain in limbo, the administration has reaffirmed its commitment to investigating other ways in which student loan borrowers can find relief.

The budget specifically mentions that the administration will be working with Congress to improve income-driven repayment plans and Public Service Loan Forgiveness (PSLF), both of which forgive a portion of borrowers’ debt after a number of years of payments. The U.S. Department of Education has already scheduled hearings to review some of the most prominent federal programs that offer targeted student loan cancellation, including borrower defense to repayment, PSLF and total and permanent disability (TPD) discharge.

“The Department of  Education’s primary responsibility is to serve students and borrowers,” Cardona said in a press release. “That means taking a fresh look at a range of regulations to make sure they are not creating unnecessary barriers, but instead can ensure that institutions and programs serve our students well.”

Any revisions to existing programs could also be informed by members of Congress, dozens of whom recently signed a letter to Cardona calling for reforms to PSLF. This letter proposed the following changes:

  • Make all federal loans eligible for the program.
  • Make all repayment plans eligible for the program.
  • Waive the employment restrictions at the time of repayment.
  • Automatically qualify borrowers for the program.

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