Student loan balances wiped for the first batch of borrowers in Biden's SAVE plan

Transcript

STEVE INSKEEP, BYLINE: Today, the Biden administration is extending its student loan forgiveness. Ever since the Supreme Court struck down the president's bid to erase hundreds of billions of dollars' worth of student loans, the administration has been seeking other ways to do almost the same thing. It's relied on a different law to announce several new forms of forgiveness, and the latest announcement is coming months ahead of schedule. The U.S. is offering forgiveness to people who have been out of school for years and still have not been able to pay their debts, even though they are small debts by college tuition standards - $12,000 or less. Education Secretary Miguel Cardona came on the line to talk about it.

MIGUEL CARDONA: So we're providing debt relief to people that need it the most. The folks that are targeted in this program are people who - I think 75% of them are Pell eligible, meaning economically, they could use the support. We're also addressing the root cause of the issue, which is the cost of college has gotten out of control. So we're increasing accountability measures to make sure that there's a good return on investment in higher education. All together, we're fixing a broken system.

INSKEEP: You just alluded to one question that I have about this when you said the cost of college is getting out of control. One thing that I wonder when I think about this debt forgiveness is if you create a kind of moral hazard not for students, but for colleges. By paying off people's excessive debts, you encourage colleges to keep charging more and more. Is there a moral hazard involved in forgiving debts, which allows colleges to encourage people to borrow more in the future, probably?

CARDONA: It's a moral hazard if you're only doing debt relief, but I believe we're balancing it out with accountability on colleges and making sure that the return on investment is clear. And we're putting pressure on those colleges that are charging, you know, a hundred fifty, two hundred thousand dollars for a degree that students could get for $50,000 somewhere else.

INSKEEP: I want people to recall that there was a Supreme Court ruling that overturned President Biden's debt forgiveness in 2023, and immediately after that Supreme Court ruling, the administration said it would proceed using as its authority a different law, a much older law than you had tried the first time. Would you explain how, if at all, your authority is different when relying on this 1965 law than it had been under the law the Supreme Court rejected for you?

CARDONA: Sure. So the Supreme Court rejected the president's most bold plan to provide debt relief in our country's history using the HEROES act. And it was pandemic related. The Supreme Court struck that down. However, the mentality of making higher education more affordable has never diminished in this administration. We use the Higher Education Act, the authority that it gives me as secretary of education to, for example, make payment plans based on income. So we're using the negotiated rulemaking process to come up with a debt relief plan that will positively impact Americans and give them an opportunity to get back on their feet, as I said earlier. And we're unapologetic about this.

INSKEEP: Can this debt relief, in your view, survive any court challenge? And can this debt relief survive a change in presidential administrations?

CARDONA: We're using the regulatory process, which we believe includes public comment and negotiations with folks that don't agree with us. So we do believe through this process it can continue. But we recognize that no matter what turn we make, we're going to have folks challenging it. There are some that benefit from the system the way it was, and I expect to hear from them. And if I don't hear from them, that means I'm not pushing hard enough.

INSKEEP: Mr. Secretary, in moving up this announcement of the student loan debt forgiveness, some people will naturally wonder if your attention is on the right problem right now because you're in the middle of serious delays with FAFSA, the standard college financial aid form. Many people are going to get close to their college acceptance dates before they hear back from the federal government about financial aid. Are you on top of that problem?

CARDONA: We absolutely are. Since day one, we've been fighting - whether it's fixing public service loan forgiveness, doing the income-driven repayment adjustments. And with regard to FAFSA, yes, we're working aggressively there. And we recognize that there are delays, and we're working daily, around the clock, to make sure that we get the information as quickly as possible. We're moving in the right direction. Change is hard. We're focused on it. And as a parent of a high school senior myself, I recognize that delays are challenging. But at the end of the day, what we're delivering is going to be better for the American people.

INSKEEP: Have you guys filled out the FAFSA?

CARDONA: Yes.

INSKEEP: How's it going? Did you hear back?

CARDONA: (Laughter) My daughter looks to me and say, hey, Pop, when am I going to hear back? Look, another issue - I have a sophomore in college. When he did the FAFSA two, three years ago, it was a long, tedious process. I remember how frustrating it was for my other child. My youngest - 15 minutes - that alone is going to make it much more accessible.

INSKEEP: I grant that the overall effort is to improve the process. But the immediate problem, as you know, is there's been this problem with calculations for adjustments for inflation. People are experiencing delays they would want to have heard in January but may hear in March. And many people have college acceptance dates of May. Can you guarantee the public that they're going to get their information in time to think about their college decisions and answer on time?

CARDONA: Yes. And we support those colleges that are stepping up and saying, you know, I'm going to push back the date. It is a major change. We recognize there are delays, and those are frustrating. But at the end of the day, more students will get more aid, more access to college. And at the end of the day, that's the goal.

INSKEEP: Education Secretary Miguel Cardona. Thanks for your time.

CARDONA: Thank you.

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