September 11, 2024

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, D.C. – 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 Higher Education Act 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 Higher Education Act 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,” said Senator 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,” said Senator 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.” 

Senator Warren has led the fight to reform our higher education system, cancel student loan debt, and hold student loan servicers accountable: 

  • On August 9, 2024, Senator Warren and lawmakers launched an investigation into the reported mishandling of student loan transfers by MOHELA, Nelnet and credit reporting agencies.
  • On August 8, 2024, Senator Warren and Representative Madeleine Dean led over 30 lawmakers in a letter urging student loan servicer Navient to reform its flawed process to cancel the private student loans of borrowers who attended fraudulent, for-profit colleges.
  • On July 29, 2024, Senators Warren, Ron Wyden, Chris Van Hollen, and Bernie Sanders, sent a letter to Secretary of Education Miguel Cardona, cautioning the Department of Education on Federal Student Aid’s transition to the Unified Servicing and Data Solution system.
  • On July 22, 2024, Senators Warren, Schumer, and Sanders released a joint statement on the American Federation of Teachers’ lawsuit against MOHELA for allegedly overcharging and misleading student loan borrowers.
  • On May 23, 2024, Senators Warren and King led their colleagues in a letter to Education Secretary Miguel Cardona, urging them to provide guidance and communication to borrowers as the Public Service Loan Forgiveness program transfers from MOHELA to the Department of Education. 
  • On May 9, 2024, Senator Warren led a growing coalition of senators in urging the Department of Education to hold student loan servicer MOHELA accountable for its failures.
  • On May 7, 2024, Senator Warren and 24 members of the U.S. Senate sent a letter to Senator Tammy Baldwin, Chair of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, and Senator Shelley Moore Capito, Ranking Member of the Subcommittee, encouraging them to provide $2.7 billion in funding to the Office of Federal Student Aid (FSA) in fiscal year (FY) 2025.
  • On May 1, 2024, Senators Warren, Carper, Kaine, and Representative Don Davis (D-N.C.) called on the Department of Defense (DoD) to release data on the Postsecondary Education Complaint System (PECS), a centralized database to track complaints against schools who participate in the Tuition Assistance (TA) and My Career Advancement Account Scholarship (MyCAA) program.
  • In April 2024, Senator Warren led eight of her colleagues in sending a letter to David L. Yowan, President and Chief Executive Officer of student loan servicer Navient, urging the servicer to cancel decades-old private student loans pushed onto borrowers attending fraudulent, for-profit colleges.
  • In April 2024, Senators Warren, Blumenthal, Markey, and Van Hollen released a new report: Servicing Scandals: Student Loan Servicers’ Failures During Return to Repayment, which reveals a decades-long pattern of student loan servicer incompetence and misconduct that has affected millions of borrowers nationwide.
  • In April 2024, Senator Elizabeth Warren led a hearing on student loan servicer Higher Education Loan Authority of the State of Missouri (MOHELA) and its failures during borrowers’ return to repayment, including MOHELA’s mismanagement of the Public Service Loan Forgiveness program. 
  • In March 2024, Senators Elizabeth Warren and Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, along with U.S. Representatives Ayanna Pressley (D-Mass.), Pramila Jayapal (D-Wash.), Raúl Grijalva (D-Ariz.), and John Larson (D-Conn.), led their colleagues in calling on the Social Security Administration (SSA), the U.S. Department of the Treasury (Treasury), and the U.S. Department of Education to end the practice of offsetting Social Security benefits to pay off defaulted student loans. 
  • In February 2024, Senator Warren, Majority Leader Chuck Schumer (D-N.Y.), and Senator Bernie Sanders (I-Vt.) released a statement calling for an investigation into student loan mismanagement by MOHELA.
  • In January 2024, Senators Warren, Schumer, Sanders, Senator Raphael Warnock (D-Ga.), and Senator Alex Padilla (D-Calif.), along with Representative Ayanna Pressley, Assistant Democratic Leader Jim Clyburn (D-S.C.), Representative Frederica Wilson (D-Fla.), and Representative Ilhan Omar (D-Minn.), led their colleagues in calling on the Secretary of Education Miguel Cardona to host a fourth session of the student debt negotiated rulemaking to consider relief for borrowers experiencing financial hardship.
  • In December 2023, U.S. Senators Warren, Richard Blumenthal, Ed Markey,, and Chris Van Hollen (D-Md.) sent follow-up letters to student loan servicers – MOHELA, EdFinancial, Nelnet, and Maximus – raising concerns about borrowers’ problems with return to repayment, requesting information about the borrower experience, and pushing back on the servicers’ claim that budget shortfalls limit their ability provide quality customer service to millions of borrowers.
  • In December 2023, Senators Warren, Schumer, Sanders, Alex Padilla (D-CA), and Representatives Ayanna Pressley (D-Mass.), Ilhan Omar (D-Minn.), and Frederica Wilson (D-Fla.) sent a letter to U.S. Secretary of Education Miguel Cardona, urging him to leverage his existing and full authority under the Higher Education Act to provide expanded student debt relief to working and middle-class borrowers.
  • In August 2023, Senator Warren, Congresswoman Ayanna Pressley, Senate Majority Leader Chuck Schumer (D-N.Y.), Senators Alex Padilla and Raphael Warnock (D-Ga.) and U.S. Representatives Ilhan Omar, Jim Clyburn, and Frederica Wilson led 79 other lawmakers in a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt cancellation to working and middle class families by early 2024.
  • In October 2022, Senator Warren and Representative Ayanna Pressley (D-Mass.) visited communities across Massachusetts to celebrate the Biden administration’s student debt cancellation plan and help residents sign up for student loan relief. 
  • In October 2022, Senator Warren called on the Department of Education to hold for-profit colleges executives accountable for scamming students out of a quality education and loading them up with student debt.
  • In March 2022, Senator Warren, along with Senate Democratic Whip Dick Durbin (D-Ill.), Senator Brown and Representatives Pramila Jayapal (D-Wash.) and Mark Takano (D-Calif.), urged Secretary of Education Miguel Cardona to swiftly discharge the loans of borrowers defrauded by predatory for-profit colleges and universities, including those operated by Corinthian College. 
  • In January 2022, Senator Warren, along with Senate Majority Leader Charles E. Schumer (D-N.Y.) and Representatives Jayapal, Pressley, Ilhan Omar (D-Minn.), and Katie Porter (D-Calif.) led more than 80 colleagues in a bicameral letter to the Department of Education calling for it to release the memo outlining the Biden administration’s legal authority to cancel federal student loan debt and immediately cancel up to $50,000 of debt for Federal student loan borrowers.
  • In October 2021, Senator Warren, along with Senator Markey and Representative Pressley, released a report that detailed the ongoing failures of the Public Service Loan Forgiveness program for public servants in Massachusetts. 
  • In April 2021, Senators Warren and Raphael Warnock (D-Ga.) led a group of colleagues in a letter to Education Secretary Miguel Cardona urging the Department of Education to take swift action to automatically remove all federally-held student loan borrowers from default.

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