The Biden administration announced on Friday that it is planning to abandon its current proposals for student loan forgiveness, which could have significantly relieved debt for millions of Americans facing financial difficulties.

The reasoning behind this decision is that the U.S. Education Department has limited resources and aims to focus on assisting borrowers who are struggling with repayments. There is also a likelihood that these proposals would encounter further legal challenges, especially with President-elect Donald Trump’s upcoming administration.

In notices that will be released after Christmas, U.S. Education Secretary Miguel Cardona pointed out the “uncertainty surrounding the implementation” of these proposals.

“The Department intends to allocate its limited operational resources to ensure at-risk borrowers can resume repayments successfully,” Cardona stated.

This shift signals a significant setback for one of President Joe Biden’s main initiatives aimed at alleviating the burden of student debt on Americans. Advocates for borrowers expressed disappointment and saw this as yet another missed opportunity to address a growing crisis. Critics from conservative circles interpreted the administration’s retreat as an acknowledgment that these proposals were never realistically viable.

Senator Bill Cassidy, a Republican from Louisiana, remarked, “The student loan plans of the Biden-Harris administration were always misleading. Today’s retraction reveals that these proposals were merely an insincere attempt to gain votes by shifting debt burdens onto taxpayers who did not attend college or repay their loans.”

During his campaign, Trump vowed to eliminate the Education Department entirely. As January approaches, officials at the department are hurriedly trying to protect policies they believe are crucial to Biden’s legacy. The decision to cancel the proposed student loan relief regulations reflects the tough choices they are grappling with given the limited timeframe. Although Biden managed to erase approximately $180 billion in student debt for around five million Americans, he did not achieve the comprehensive relief he initially aimed for, hindered by legal issues and opposition in Congress.

Scott Buchanan, the executive director of the Student Loan Servicing Alliance, which advocates for student loan servicers, mentioned that this decision aligns with a broader effort by the Biden administration to protect federal regulations – which can take significant time to establish – from being altered or revoked when a new president takes office.

“The incoming administration could change the rules as they see fit,” Buchanan stated.

Education Department officials have spent years navigating through bureaucratic processes to push these regulations forward. After extensive public discussion, a group of federal negotiators approved the ambitious proposals in February. The department later disclosed one plan in April, assuring borrowers they could receive debt relief as soon as fall 2024. Another plan was shared just 11 days before the November elections.

However, both plans are now set to be discarded, as announced on Friday.

What were Biden’s student debt relief plans?

One of the proposals aimed to forgive up to $20,000 in unpaid interest for over 20 million borrowers, as highlighted by the White House in April. Additionally, more than four million borrowers who had been in repayment for 20 years or longer would have qualified for full debt cancellation.

The second plan sought to forgive debts for borrowers identified by the federal government as being at high risk of defaulting on their loans in the next two years, contingent on specific criteria related to their existing debt, income, and assets.

The second initiative also aimed to create a new application process for borrowers facing various economic hardships, including medical expenses, losses from natural disasters, and child care costs.

Advocates for borrowers expressed their frustration with the latest development. Braxton Brewington, press secretary at the Debt Collective, mentioned that with Biden’s larger initiatives off the table, he hoped the administration would use the remaining days before Trump’s inauguration to expedite relief for particular borrower groups, such as victims of predatory colleges.

“It makes sense to step back from plans destined to fail,” he acknowledged. “Yet, it’s unfortunate that so much time has been lost.”

Changes Regarding Transgender Athlete Rights and Other Regulations

In addition to canceling the student loan relief proposals, the Education Department has also officially withdrawn a proposed policy that sought to clarify the rights of transgender athletes.

Furthermore, changes to regulations related to college accreditation and textbook fees have been officially abandoned.

Some other regulations aimed at broadening federally funded programs for college access among undocumented students and enforcing attendance requirements in online courses may still be approved before Trump takes office.