The Policy and Politics of Student Loan Forgiveness


​​​​​​​​​​​​​​Aired May 19, 2022

Almost everyone has an opinion about student loan forgiveness. But it's often more complicated than many think. There are seven federal student loan programs and 16 repayment options. Which programs might be included in the Biden administration's loan forgiveness plan, if it happens? When might it happen? With potentially 45 million borrowers involved, will the administration make a tradeoff between ease of implementation and the ability to target it? And with the midterms just six months away, what are the politics of loan forgiveness? Jon Fansmith and Terry Hartle (try) to answer these and other questions in a live recorded episode.

Here are some of the links and references from this week’s show:

Biden Plunges Into the Risky Politics of Student Loan Debt
The Washington Post (sub. req.) | May 15, 2022

OPINION: Student Debt Is Crushing. Canceling It for Everyone Is Still a Bad Idea.
The New York Times (sub. req.) | May 14, 2022

Harder Than It Sounds: Income-targeted Student Loan Forgiveness Invites a ‘Train Wreck’
Politico | May 13, 2022​

White House May Limit Student Loan Relief to Incomes under $125,000, Psaki Says
Forbes | May 3, 2022

U.S. Forgives $6.8 Billion in Public Service Worker Student Loans
Bloomberg | May 4, 2022

Biden's Latest Student Debt Move Will Bring 3.6 Million Borrowers Closer to Loan Forgiveness
CNN | April 29, 2022

Schumer Calls on Biden to Cancel $50,000 in Student Debt for All
CNBC | September 21, 2021

Can Biden Cancel Student Debt? Depends Who You Ask
Inside Higher Ed | August 11, 2021


 Read this episode's transcript

Jon Fansmith: Hello and welcome to dotEDU, the Higher Education Policy Podcast from the American Council on Education. I'm Jon Fansmith with the ACE's government relations team. In this episode of our monthly interactive recording, ACE Senior Vice President Terry Hartle and I take a deep dive into what we're hearing and what we know about student loan forgiveness. As always, we appreciate your questions and suggestions for show ideas, and you can share those with us at That's Now, enjoy the conversation.

Jon Fansmith: Hello and welcome to the May edition of the Public Policy Pop-Up. We are going to do a deep dive this week into the politics and the policy of student loan forgiveness. This is an issue that's getting a lot of attention here in Washington, DC, and we're certainly seeing that in this webinar. Lots of people registered, lots of questions coming in, and I think it's going to be a pretty exciting and engaging conversation, and I am lucky as always to be joined in that conversation by ACE Senior Vice President Terry Hartle. Hello, Terry.

Terry Hartle: Delighted to be here with you.

Jon Fansmith: Always good to have you. Terry, I said there's a lot of interest and engagement in this, maybe a record number of questions submitted to one of our Public Policy Pop-Ups. Why don't we start by you giving an overview of where we stand right now and why we're talking about this?

Terry Hartle: Before we start, let's distinguish a couple of things. One is student loan cancellation or forgiveness versus the restarting of student loan repayment, and we can actually add a third category there, which is improving existing repayment options.

Beginning in March 2020, people with student loans have not been required to repay loans because of the economic dislocation caused by the COVID pandemic. The Trump administration initially put the pause in place. It was very quickly approved in statute by Congress. It has been extended several times. At the present time, nobody who is repaying a student loan needs to be repaying a student loan at least until September. That's the restarting of repayment.

When will repayment start? That's an open question that people have been talking about for some time, but cancellation is a different matter. The president proposed during the 2020 election campaign to cancel $10,000 of debt for all student loan borrowers, and that is what is at work here today.

Democrats initially were all over the map in terms of how much was to be canceled, $10,000 according to President Biden. A lot of people, including Chuck Schumer, the Senate majority leader, has asked for $50,000 in loan cancellation, but the administration is thinking about how to proceed. Initially, the administration's view was we don't have legal authority to do cancellation. They have apparently decided that they do have the legal authority to do cancellation, and they are thinking about how much cancellation to do, not whether to do it.

Finally, the third thing I mentioned not shown on the screen, improving existing options, one of the things the Biden administration has done a pretty good job at is improving existing repayment and forgiveness programs that are already in place. This is stuff like borrower defenses against repayment. This is public service loan forgiveness.

The administration has helped, by their estimate, 700,000 people already just by making existing programs work better. Keep in mind, that's 700,000 people out of 43 million people, or 45 million people, somewhere in that vicinity, who actually own student loans and need to pay the government money, so three separate dimensions. A lot of what the media's focused on now, of course, is cancellation, whether they will simply forgive some or all loans across the board for some or some subset of borrowers.

Part of the challenge that we face in talking about this is that, when we talk about federal student loans, we are talking about a big, messy set of programs. There are seven separately identifiable federal student loan programs. There are 16 separately identifiable repayment or cancellation options already existing in the law. One of the first questions that comes up is which of those seven loan programs would be covered by this forgiveness or cancellation effort? The answer is, potentially, all of them. It is not entirely clear what loan program or programs the administration is talking about.

One of the big issues that the administration will have to weigh is that there are millions of people involved. The Department of Education says that there are 43.4 million people who are repaying student loans. This weekend, The New York Times used the number 45 million people, so there might be some disagreement even about how many people are repaying student loans. That gives you some idea of the complexity about trying to do something that could affect that many people.

A part of the challenge the administration will face if they move forward with this is the trade-off between the ease of operations and the ability to target it. One of the arguments against loan cancellation, loan forgiveness is that a lot of the benefits would go to people who went to graduate and professional schools who may be making a lot of money and who might not under any reasonable standard need assistance paying off their student loans.

The challenge the Department of Education will face is that they either cancel loans for everybody across the board, which has the advantage of administrative simplicity, or they need to review every single student loan that is held by a borrower and make one-on-one decisions, an extraordinarily large amount of work if they have to break down and do this on a case-by-case basis.

The implementation of this is going to be... Excuse me. The creation of this will be controversial. I think one of the things the Department of Education particularly wants to avoid is complicated administration so that they don't have a repeat -- well, for some of you with a slightly longer memory, remember the roll out of the Obamacare website in the first term of President Obama and what a disaster that was -- so the last thing they want to do particularly of the underlying policy is going to have some controversy to it.

Nothing is set in stone. The administration has not provided any details. As near as we can tell, the administration is not talking about what they're thinking to Democratic offices on the Hill in any detail about the size of the cancellation, whether it's $10,000, $20,000 or more, the eligibility, whether it is for everyone or whether there is some sort of an income cap or some sort of an elimination of graduate and professional students. Those questions have not been answered.

Right now, we're trying to figure out what the administration is thinking about. One of the big questions that matters to us in higher education, of course, are the operational issues that the Department of Education is concerned about because their ability to implement something like this that could affect this many million Americans is likely to be a matter of great concern.

Jon, I think that's a pretty much a summary of where we are. Do you want to talk about how we got here and what led us to this point?

Jon Fansmith: Yeah. I think that might be helpful in terms of illuminating a little bit of some of these policy issues that you touched on in the political debates. A lot of this, unsurprisingly, arises out of politics and, particularly around loan forgiveness, we are tracking back to the 2020 presidential election when there were a variety of Democratic presidential candidates who had varying levels of loan forgiveness as part of their campaign.

Obviously, the president had a $10,000 loan forgiveness policy as part of their proposals, but it went all the way up to universal loan forgiveness across all federally held debts among other candidates. There's always been this spread on the Democratic party about what is the appropriate level of relief here. What we tended to see was, once the Biden administration took office, there was this interesting back and forth between the Hill and the White House on who would do this.

You might recall there were previous statements about the Department of Education was looking at whether they had the authority to do this. Terry touched on this a little bit. There is a memo that was completely redacted that spoke to the department's legal authority. There had been a memo produced under the Trump administration saying that they don't have the authority to do this. Outside the groups that have submitted memos, it's not entirely clear whether they have the authority or not. It tends to be whichever opinion you have. You can find a memo that backs it up, but the administration pursued it by basically saying we want Congress to act.

Congress and particularly progressives, voices like Chuck Schumer and Elizabeth Warren who have been very, very vocal on this issue, fully believe the president can do it. They want the president to do that. It's easier for the president to do that. If you do it in Congress, you have to figure out some way to pay for it. If the president can do it, it's just coming out of the Treasury. They've been going back and forth about this. As they've been going back and forth about this, we're seeing this increasing public attention to the issue.

Again, this is not a new conversation. It dates back a couple of years to the specific proposals we're talking about, but forgiveness has been talked about for a long time in part because of some of the other programs Terry mentioned. Congress has put together 16 different forgiveness proposals, usually very specific ones, but this is an element of policy-making we've seen a lot of, but increasing attention. You're starting to hear these indicators very clearly that the administration is moving toward this.

About a month ago, Senator Schumer had said that he talked to Joe Biden and this was very much on his mind. He thought he was closer than ever to forgiveness. Then the president met with members of the Congressional Hispanic Caucus. He said that he was likely to extend that repayment pause, and then they asked about forgiveness, and he said, "Well, I can't tell you. We're looking at our options, but you're going to like what we do," and then, following up on those, you start to hear statements from White House officials, particularly Chief of Staff Ron Klain and Jen Psaki, the press secretary for the president, essentially confirming that they were looking at those things Terry was talking about, an income threshold, loan forgiveness, targeted, maybe limited, lower than that 50,000 threshold.

Why are they talking about this? Why is this getting increasing attention? Well, the last bullet makes it pretty clear. We are approaching a pretty consequential set of midterm elections. Democrats hold both the House and the Senate and the administration, but very narrowly, and the midterms aren't looking good for Democrats.

In particular, one area that's getting a lot of attention is the fact that Joe Biden is losing the support of young voters and, in fact, young voters who have moved their favorability ratings have dropped more than any other group of voters who had previously supported him. There's a lot of interest politically in advance of these elections and shoring up with a big part of the Democratic base. That might explain some of the timing issues we're looking at, so that brings us to where things stand now.

I'll say, Terry, you covered a lot of this in the intro, so I'll skip through some of these things, but, really, it's unclear. We don't know. It's not clear that they know exactly where they want to put it. We've seen the parameters. They've put out $125,000 income. They talked about maybe $150,000 as the income threshold for doing this. People assume they're talking about $10,000 because that's what was on the campaign. President Biden ended at one point and said he did not want to do $50,000 in forgiveness. They have never publicly entertained the idea of universal forgiveness, so if you're trying to guess what they're doing, the signs are clearer than most for $10,000 in forgiveness or at a $125,000 income or below.

There's also been a discussion because the president has talked about this that he is in favor of relief for undergraduate borrowing, but not necessarily for graduate borrowing. You hear those rumors that there are discussions that they might make forgiveness only apply to undergraduate loans, not to graduate loans.

As Terry pointed out though, any kind of test you put into place greatly increases the complexity of doing this, so if you do an income threshold, then you have to set up a process that allows them to determine borrowers income. If you set up that it's graduate versus undergraduate loans which are forgiven, you have to start unpacking loans that may have been consolidated that may have originated from multiple places. It gets really complicated really quickly.

The timing here is really important. The reason, if you accept that part of this is driven by political concerns in the midterm elections, you need to announce something and put it in place and have it so that borrowers are seeing forgiveness before the elections to really get the full benefit of doing this as a policy.

Loan repayment, Terry touched on this. It's scheduled to resume September 1st. The president said, essentially, "I've always extended that repayment pause." It seems very likely they will extend it again. Frankly, the idea that they will make 44 million or 43 or 45, whatever number it is, borrowers start repaying their student loans two months before the midterm elections just doesn't seem very likely. Related to that, if you're going to make this announcement about broad-based forgiveness, doing that as soon as possible so you have time to deal with implementation issues so borrowers will begin to see that in their balances before they go to the polls, that would indicate that they want to move as quickly as possible.

Terry, we've been hearing these rumors about something happening in the next few weeks, but based on the conversations we've been having with folks on the Hill and folks in the administration, they don't seem ready to move that quickly. There may be a real desire to move that quickly based on all these factors we're talking about, but it doesn't seem like they'll be capable of doing it, and that's in part because of these implementation challenges. Once they set a policy and it's not clear there's agreement on what are the best ways to go forward, figuring out how to do that is a really big lift for all those reasons we touched on.

Then, finally, we started, I started, by talking about authority, the debate going back and forth. It's not just a rhetorical political issue. Do they have the legal authority to do this? The balance to an administrative action that there may be questionable legal authority to is lawsuits. There's been a lot of attention about who would actually have standing to bring a case. Not surprisingly, there's been memos that say no one would have standing. The administration could do this. Similarly, there's been a number of memos issued that said it could be governors of individual states. It could be a collective of servicers that other groups may have standing. They bring a suit that would block this.

Obviously, if you're the administration, this is a signature effort you're putting forward. What you really don't want to see is something that you put it forward and then it winds up going into the courts for a few years so you're not seeing any of the political benefits particularly in the short term, which is what seems to be driving the concerns right now.

Terry, I've sort of danced around some of these political issues. You touched on it. A lot of backlash coming towards colleges and universities is part of this discussion and a lot of political ramifications that we're hearing from people both in favor and opposed to it. You want to go into that a little bit more deeply?

Terry Hartle: Yeah, but before we do that, following up a little bit on what you were saying, I think, Jon, you're absolutely right. There's a lot of talk about this at a very general level, but there's very little conversation at it, about it, at a specific level along the lines of, well, how much money, what programs would be eligible, would there be any targeting or means testing?

I think you're exactly right. The administration is actively working on this very hard, but I don't think they've focused in yet on exactly how they're going to pursue this. I think the next action-forcing event comes at the end of August because that is the date at which the repayment pause ends. Presumably, in September is when now people would have to start repaying their loans unless the administration kicks that repayment pause out a little bit further.

It might be that the administration will conclude that the best thing for them to do is to announce whatever they're going to do on cancellation and forgiveness, but give themselves a couple of months to put it in place so that they won't have to run the risk of some sort of an administrative meltdown before the election. They can promise the benefit to people. People can know what's coming. That'll give the Biden administration the political benefits that they are seeking, but it won't require them to have something operational in time for the election. If they do that, I think they'll probably kick the repayment pause to the end of the year as well.

We could be looking at this for several more weeks or a couple of months before we really, really see anything. I'm pretty confident that, if the administration were focusing in on the how-to-do-it aspect, the operational questions that are so important, that we would be picking some of this up in the conversations we're having with people, but we're just not hearing anything about that at all. Does that seem reasonable to you?

Jon Fansmith: Yeah. No, and it highlights that this is a very political process right now. We're talking about a one-time forgiveness. This is not a change to underlying policies going forward. This is an exceptional event, and a lot of what's driving the determinations really are not those operational ones. They're not the long-term view. It's what are we looking at in the near term and how do we address that? I think you tend to hear a lot from the White House around this. You don't tend to hear nearly as much from the Department of Ed in part because I don't know that they're the ones central to the decision-making.

Terry Hartle: Yep. No. Unfortunately, it's pretty obvious that the concerns that the department is raising about how they would actually execute this haven't been given the attention in the White House that I think they want. The fundamental point here that I think you've made is that there are policy arguments for and against doing this, but this is being done for political reasons.

Democrats are hoping it will help an important part of their constituency. Democrats are hoping that it will encourage younger voters to go to the polls in November. Republicans are arguing that this is a very discriminatory benefit. It will not help a lot of people who vote Republicans. It looks like another bit of Democrats benefiting college elites at the expense of the common man. There are policy arguments in favor and policy arguments against, but this is a political decision. This is not based on any careful weighing of the policy implications.

I think the big issue, the thing that you and I are most concerned about, Jon, is that this is going to put higher education in the middle of the culture wars in a very, very big way. This could become a very big deal in the midterm elections with Democrats arguing, "Look what we're doing for you if you want to get a college education," the Republicans arguing to their voters, "The Democrats don't care about you. They just care about elites who go to college."

I think that this could become an ongoing source of political controversy and I think that, particularly, if Republicans take back control of the House and/or the Senate following the midterm elections, this could be a focal point for congressional investigations and deep dives into how they decided what they decided.

The risk that I see for colleges and universities is that we're starting to see, from both conservatives and liberals, people saying, "Well, the issue here really is colleges. College is too expensive. The value, the economic return of a college degree isn't that high. Colleges are responsible for students borrowing so much money. We need to focus our attention on colleges and universities. We don't need to focus our attention on other things." We could find ourselves really on the firing line both from the left and the right on this particular issue.

There've actually been a couple of tweets that I've seen in the last week that just illustrate what the potential risks are for colleges and universities. JD Vance, a Republican Senate candidate in Ohio, said this over the weekend, that it's a massive windfall to the rich, to the college educated and, most of all, to the corrupt university administrators of America. That probably gives you some idea of the very populist approach that some conservatives are going to take to describing this, most of all the corrupt university administrators of America.

It's not just the conservatives, the Republicans that are raising these questions. Chris Murphy, a very distinguished senator from Connecticut, Democratic Senator from Connecticut, if you had a continuum of Democratic senators between Joe Manchin at zero and Bernie Sanders at a hundred, Chris Murphy would be 75 or 80. You can see what he's saying here is that the problem is the cost of a degree that they have to start forcing higher education to engage in radical structural reform soon. This is how the Democrats might turn around and go after colleges and universities.

I think the implications for us going forward are pretty, pretty significant and, perhaps, a much more negative attention to colleges and universities than we have seen in a long time in the political arena. We're a collateral damage in a political fight rather than a policy discussion.

I think where ACE is right now and what we will be saying about this is that canceling debt will help millions of people who are struggling to repay their loans. That's, obviously, what the Biden administration intends. It's probably also incontrovertible. If you wipe away debt, it'll help people repay their loans, but the bottom line here is that the student loan program is broken and really needs to be overhauled.

The federal student loan programs were last reauthorized in 2008, which was before we completely federalized student loans in 2009. The federal government did manage to make loans pretty seamlessly, but problems have started to occur in the repayment area, and we're seeing the results of that right now with these calls for across the board cancellation.​​

It's not that there aren't changes that need to be made in the student loan program. For example, focusing on customer service in the servicing arena rather than focusing on lowest cost bids would probably be a very good step to take to help people who are struggling to repay their loans.

Having workable cancellation and forgiveness provisions. As I mentioned earlier, right now, there are 16 in negotiated rule-making. The Biden administration has proceeded to propose to add a 17th. There are things colleges and universities need to do. We probably need to increase the counseling that we are giving to borrowers before they take out student loans.

I think another question is whether or not colleges and universities ought to have the authority to set lower loan limits. Right now, student loans are an entitlement to individuals. Even if colleges know that the students don't really need a student loan to meet the cost of their education, if the student is enrolled, they are entitled to the money. The school can't prevent them from taking it out.

How we set interest rates in the student loan program, government borrows money at about 3 percent, and they lend it to parents and graduate students at seven and a half percent. Is this a good idea? Well, I think that's an open question. Now, does it make sense to continue to impose a tax on people who take out a student loan in the form of origination fees? I think that's another question that we ought to be addressing.

We think we, as colleges and universities, need to recognize the enormous concern about this in both political parties the extent to which it creates serious problems for many of our former students. We need to identify with Congress and with the executive branch proactive steps that the government can take to make the programs work more effectively and efficiently, and I think that that'll be a focal point in the coming year of a lot of discussions in Washington, DC.

I think I will stop here, Jon. I don't know if you want to add anything or correct anything I said, but assuming you don't, we can go to questions if we have some.

Jon Fansmith: We have plenty of questions and more coming in all the time so, and then I encourage you to keep sending in those questions. Terry, I think this is a good follow-up question to where you ended. One of the questions we got was will the current focus on student loan forgiveness lead to a wider examination of how students finance their educations?

You talked about some things that could be done to improve that process. The Biden administration grants $10,000 forgiveness. The day afterwards, students will still be borrowing. Do we think there will be substantive steps to say, all right, this was a one time gesture or measure? Where do we go from here, or is it we're going to carry on as usual?

Terry Hartle: I think what we want to do is we want to encourage follow-on steps that look at a minimum at federal student loan policies and practices and parts of the federal student loan programs that make it much harder for students to repay their loans. We want to look at things that drive up the cost of student loans such as how the interest rates are set, such as origination fees, as I just mentioned.

Do we get to a broader discussion about how America finances post-secondary education? I don't think so. I think it's long overdue particularly because states have been running away from their obligation to finance public higher education for a generation, but this is being done for political reasons, and it's going to be interpreted as a political action. It's not going to be seen as something that underscores what we think it is, which is a need to have some basic conversations about how we help people pay for post-secondary education in the United States.

I think a best case scenario that I see is that this action, when we see it, leads to some rethinking about federal student loans and how they work and how they might be improved for borrowers. Beyond that, I have a hard time seeing it happen.

Jon Fansmith: We've also gotten a number of questions on a related theme, and I think this goes a little bit to some of the political debate over here, but I'll highlight from Greg Schuckman and from Ashley Reich. Apologies if I'm mispronouncing your names.

They both asked questions around the idea of there's lots of borrowers who have been repaying their loans, in fact, may have repaid them entirely. How do you see this playing out there? Those borrowers may feel that they were not given a benefit. They've asked, some people have asked about is this going to be you get a retroactive credit for what you would have received if you'd gotten forgiveness instead of paying off your loans? Do you see any action there particularly with some of the criticisms of this that you... like we saw from both the left and the right?

Terry Hartle: No. I think if forgiveness happens, Jon, I think it's one of those public policies where you happen to be in the right place at the right time. I don't think that there will be any effort to make it retroactive to people who may have paid off their student loans in the past nor do I think there'll be any effort to extend it to people who will start borrowing money when they go to school in September. I think this is just a one-shot effort that probably sets an expectation of future loan cancellations, but with no guarantees that that will happen. Do I see it being retroactive? No.

One of the issues that doesn't get talked about too much with respect to loan cancellation/forgiveness is the cost that this will impose. If you forgive $10,000 for every one of the 43 million people who have student loans, the cost will be about $370 billion. Under the Federal Budgetary Rules, that don't make sense anywhere except in Washington, if Congress were to authorize that. If Congress were to tell the Biden administration to do it, Congress would have to offset that $370 billion. If the administration does it on its own without approval from Congress, then there are no budgetary consequences.

Having said that, moving $300 billion around even in an economy as large as the United States is going to have some implications. One of the things you will hear from conservatives if that's what is done is that this is just going to fuel the fires of inflation because the federal government is spending a lot of money, or in this case, federal government is giving up a lot of money that otherwise they would count as revenue. I think this is going to benefit people who are repaying student loans right now. We don't know if it'll benefit all of them or some of them, and that's what we're watching to see how the administration decides to play it.

Jon Fansmith: Speaking of people who may or may not benefit from loans being forgiven, we have a question about the idea of means testing. It's these income thresholds of 125,000 or, in some cases, 150,000 we've seen reports of. The question is basically, Terry, what are the pluses and minuses of doing this? Why is the Biden administration doing this?

Terry Hartle: One of the biggest arguments against loan forgiveness is that it will dramatically over-benefit people who went to graduate and professional schools, borrowed a lot of money and are paying off debts relatively easily because they have pretty good incomes to draw on, that this will not really help lower income and lower middle income people as much as it will help people who are doing just fine. Thank you very much.

The argument in favor of means testing it is that you can focus it on the people who are having the most difficulty repaying their loans, people who clearly aren't likely to be able to repay loans. You can target it on individuals. The biggest argument against means testing in some fashion is that the Department of Education doesn't have a very easy way to do means testing and, therefore, they would have to look at each borrower individually and make a separate decision.

The Department of Education doesn't have the ability to get income data from the IRS that they could use for this. Federal Privacy Laws regarding the IRS prohibit that, so the Department of Education will have to figure out another way to measure income. One of the suggestions we have heard about is self-certification. In other words, you just tell them whether you are eligible. Obviously, you could build up something where you required people to send in a copy of their previous year's tax return so the government can assess their income, but that's 43 million people potentially, an extraordinarily huge administrative workload.

The challenge, the trade-off essentially is a more focused, a better targeted public policy versus administrative complexity and possibly some garbling of the message because it would benefit some people, but not all people.

Jon Fansmith: As a follow-up, we just had a question from Carla Cortez who asked about graduate borrowing, but she was specifically saying what about those who require a graduate degree to enter their chosen field and areas like social work, education, healthcare, but don't necessarily earn high incomes, and then saying you're excluding graduate borrowing in some ways or would... it would... not in some ways. It would explicitly exclude those people who aren't seeing necessarily the same economic benefits as others who have pursued graduate education.

Terry Hartle: Yeah, and that's a perfect argument for why this ought to be means tested, because there are an awful lot of people who will go to graduate and professional school and who will engage, be engaged in very important occupations in our society. You've mentioned a couple of them. Divinity would be another one we could mention, Jon, and they simply don't make the money to pay off their loans that people who go to law school and medical school and dental school, business school typically make.

The trade-off here is pretty easily stated. It's how much of a complicated super structure do you want versus how much do you want a universal benefit? I think that's one of the big issues that the administration is wrestling with. The easiest way to make this work, the way to avoid a collapse in the Department of Education's administrative capabilities to avoid a repeat of what we saw with the rollout of the Obamacare website, the way to do that is simply to provide the benefit to everybody, but that's very expensive, and it means an awful lot of people who are making a large amount of money are going to benefit from this.

Jon, you and I have colleagues at ACE who haven't been in college for 10 or 15 years who are making pretty decent salaries who could find themselves eligible for the benefit, depending on how it's defined. I think that's the trade-off we face.

Jon Fansmith: Yeah. I think that's really well-said, Terry, too, and related to that, we're getting questions around, well, why can't the department do this more easily? I think I'll highlight Elaine Maimon. Again, apologies if I'm mispronouncing your name.

She asked that the FAFSA already requires IRS info. There's that data link now that, when you apply for the FAFSA, you can give your consent to have the IRS work with ed to release your records. Elaine was asking, "Couldn't loan forgiveness be limited to undergraduates who filled out FAFSA forms?"

I would say there's two things: One, the Department of Education has legal authority to link with IRS only for the purposes of finding out aid eligibility and amounts, not for the purposes of providing forgiveness. They don't actually have existing statutory authority to do that, or else we wouldn't be talking about these challenges. Again, limiting it to undergraduates who have filled up the FAFSA, that information changes. If it is tied to income, that's changed since you last filled out the FAFSA. It may apply to current students or students recently out of college. It might be a way to do that.

Think about all those borrowers, Terry, like you were just talking about, who are 10 who are 15, who are 20 years out of college and still repayment. You wouldn't have accurate information for them, so it is, the more you dig on this, I think you start to see this is a very, very complicated operational issue that even setting aside those big policy questions that you've talked about so well, Terry, the more you dig, the more complicated you realize this is.

Terry Hartle: Yeah. If there were an easy, straightforward, reasonable way to do this, people would've figured it out by now. It's just a complicated system. As you said, Jon, there's a very explicit legislative approval for sharing the FAFSA and the IRS data. There is no federal approval. In fact, there's a law that would ban the IRS sharing data directly with the Department of Education.

Now, could the Department of Education send a letter to everybody who is repaying a student loan and say, hey, if you want to be eligible for this, you need to fill out this form and ask the IRS to send us your data? Yeah, the Department of Education could presumably do that, but that also adds another step that means dealing individually with millions upon millions of individuals.

That's not something the federal government does very well. Just think of the difficulty people have in getting an answer or getting someone to answer the phone at the Internal Revenue Service. Think about the difficulty of talking to somebody in Social Security these days. The Department of Education hasn't, unlike SSA and the IRS, been trying to deal with individuals for decades. This gives the department a whole new set of responsibilities if they have to start dealing one on one with that many people.

Jon Fansmith: I would raise, because I think it transitions nicely into the next question, the department has that process in place right now related to loan forgiveness with PSLF, and it's been so problematic in the management and implementation that we're in this period where the department is using extraordinary measures to address public service loan forgiveness and borrowers who might qualify for that so, which is my tease to the question. We've gotten a number of questions that are around this issue of other paths to forgiveness and how does this impact those.

Public service loan forgiveness is obviously one that a lot of people have heard about, but also, Terry, you talked about there are 16 separate loan forgiveness programs. Somebody just pointed it out. Rachel Smith said PSLF is still a mess. I think a lot of people would agree with you, so certainly a reason for concern about another similar process if that's how it's going about it.

Terry, maybe you can talk a little bit just briefly, I know 16 programs is too much to go into all of them, but the fact that how does this interplay with that? Is this meant to replace them? Is this meant to supplement them or is this something wholly different?

Terry Hartle: It's something wholly different. None of the existing programs would go away. I mentioned seven student loan programs. Five of those alone programs have explicit cancellation and forgiveness programs built into the individual loan programs. In addition, there's another 11 separate cancellation and forgiveness provisions like public service loan forgiveness, like borrow defenses against repayment. That's how we get to 16.

The Department of Ed is trying to make the repayment and cancellation provisions that are in the law work. The Department of Education told us a year ago that they were going to do everything they could with public service loan forgiveness to make it a workable program, but they told us they would clearly need legislative fixes to really make the program work effectively. We have not yet seen nor have we heard anything from the Department of Education about what those legislative fixes will look like.

I've indicated to the department that we at ACE and our association colleagues will be very aggressive in trying to lobby to get those changes made in statute, but we need to know what changes the Department of Education needs. So far, the Department of Education has not said what those will be.

Public service loan forgiveness is ultimately the nightmare, I think, that the Department of Education would like to involve because they're looking at every student loan, every student borrower who claims public service loan forgiveness on a case by case basis. It is very labor intensive. It is very detailed work. That takes an enormous amount of time, and that's what the department wants to avoid if they do some across-the-board forgiveness activity. I think public service loan forgiveness is a model, and it's a cautionary tale.

Jon Fansmith: Terry, we are running close to the end of our time. I know you like your designation as an honorary lawyer, so I thought that I would give you the opportunity to play honorary economist because we've gotten two questions that are I think diametrically opposite. One is what would it do for our economy to relieve millions of people from burdensome student loan debt? And then, on the flip side, we had a question that said, with this kind of broad-based relief, would that increase the inflationary pressures that we're already seeing and are already concerned about?

Terry, go back to whatever level of economics you last took in higher education and, tell us, is this going to exacerbate inflation or is this going to supercharge our economy?

Terry Hartle: Those are not mutually exclusive.

Jon Fansmith: Fair point.

Terry Hartle: The fact of matter is, if we did provide across-the-board loan forgiveness to individual student debt who are having difficulties repaying their student loans, they would have more money to address their daily needs and expenses. We'd be leaving them with more money in their pocket that would certainly leave them in a personally better financial situation.

Having said that, if you're pumping $300 billion into the economy or you're forgoing $300 billion in revenue, you don't do very much to relieve the inflationary pressures that are such a key subject in Washington these days and something likely to be a very big deal in the midterm elections. I don't think those two are mutually exclusive. We could have something that has a very positive impact on millions of people and, at the same time, creates a deeper, more extensive economic problems over the longer term.

Jon Fansmith: Great. Well, that sounded very much like an economist, Terry. I think we'll work on that honorary degree for you. We are up against our time. I want to thank everyone for participating. Let me remind you that we do these on a monthly basis, so keep an eye out for another announcement from ACE for the June Public Policy Pop-Up, but I also want to thank you all for the questions. There really was a great volume of questions, very thoughtful questions. That makes this, I think, particularly enjoyable for me and Terry to do as well. Thank you so much for joining us and have a great rest of your day.

Sarah Spreitzer: As always, podcast friends, you can check out earlier episodes and subscribe to dotEDU on Apple, Google Podcast, Spotify, Stitcher or wherever you listen to your podcasts. For show notes and links to the resources mentioned in the episode, you can go to our website at and, while there, please take a short survey to let us know how we're doing. You can also email us at to give us suggestions on upcoming shows and guests.

A very big thank you to the producers who helped pull this podcast together, Laurie Arnston, Audrey Hamilton, Malcolm Moore, Anthony Truehart, Hisani Stenson, and Fatma Ngom. They do an incredible job of making this happen and making Jon, Mushaq and I sound as good as possible.

Finally, thank you so much for listening.​​

About the Podcast

​Each episode of dotEDU presents a deep dive into a major public policy issue impacting college campuses and students across the country. Hosts from ACE are joined by guest experts to lead you through thought-provoking conversations on topics such as campus free speech, diversity in admissions, college costs and affordability, and more. Find all episodes of the podcast at the dotEDU page.

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