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Education Secretary Cardona explains Biden's student loan forgiveness plan


President Biden is canceling student debt. Not all of it - up to $10,000 of federal student loan debt may soon be forgiven for borrowers who make under $125,000 per year. That figure goes up. It is doubled to $20,000 for those who got a Pell Grant, which is based on need. And payments for federal student loans will now remain paused through the end of the year. Biden made the announcement today.


PRESIDENT JOE BIDEN: Here's what my administration is going to do - provide more breathing room for people so they are less burdened by student debt and, quite frankly, to fix the system itself.

KELLY: Well, the job of administering all this falls to the U.S. Department of Education, so we have called the head of that department. Education Secretary Miguel Cardona, welcome.

MIGUEL CARDONA: Thank you. Glad to be here with you.

CARDONA: I'm curious how you got to this number - $10,000 or 20,000, as we said, if you received a Pell Grant. They're nice round numbers, but as you know, some argue it should be zero, that the federal government doesn't need to do this. Others say it should be way bigger, that the government needs to cancel all the outstanding student debt.

CARDONA: Sure. You know, this is one of those - similar to school reopening, you have to go with what you know is going to work to help American people, and you're going to have to move aggressively on that. We're proud of the announcement today of $20,000 in debt cancellation for those who qualify for Pell, $10,000 for those who are non-Pell recipients with salaries under $125,000. We know, you know, 90% of the relief dollars are going to go to people making under $75,000. So the goal here is really to make sure that our borrowers are not worse off after the pandemic than they were before. And we feel targeted assistance using those numbers and using the qualifications that we have are the way to do that.

KELLY: How many people could be affected?

CARDONA: Well, you know, we know across the country, 43 million have loans out there. And we think, you know, up to 40% of them could be totally canceled. So 20 million Americans can learn - have learned today that their entire debt can be cancelled. We're really proud of that. And we know that it's one way to make sure we're helping Americans. As we helped small businesses during a pandemic, we're reinvesting in Americans here with this (inaudible).

KELLY: A lot of those 43 million people will be wondering when - when am I going to get this? What's the answer?

CARDONA: Yeah, that's the million-dollar question today, you know? It's really important that folks know that we're also improving a system that was broken and that was antiquated. The Federal Service Loan Administration has really gone through some overhauls to make the process smoother. So what we're asking folks to do is visit studentaid.gov/debtrelief and sign up for automated emails so that more information can come. We know many people have questions today about whether they're eligible or how they do it. We're going to make this process as simple as possible. There will be an attestation process that's going to be pretty simple. But we also know that for 8 million borrowers, we have enough information now to process some of this loan forgiveness.

KELLY: They're already on the books, yeah.

CARDONA: They're already on the books. So studentaid.gov/debtrelief to get yourselves set up for an automated email.

KELLY: All right. Let me put to you some of the questions, some of the concerns that are surfacing and allow you to respond.


KELLY: Start with people who have maybe struggled, have saved. Maybe they just finished paying off...


KELLY: ...Their student loans. They're going to be mad as heck today. What do you say to them?

CARDONA: Well, look; you know, again, this is very targeted to help address the impacts of the pandemic. We recognize some folks just finished paying their loans off right before the pandemic. But everybody knows someone that's buried in loan debt. Everyone knows someone that's struggling post pandemic. And, you know, if we help folks in the communities so that they - reduces the chances of them going into default, everybody wins. It helps the economy.

KELLY: Understood. But just to be clear, there's nobody grandfathered into this.

CARDONA: No, this is for those who have loans now. Again, it's - the goal is to make it out of the pandemic no worse off than you were before the pandemic. So this is targeted relief based off of pandemic. And we want to make sure that people can get back on their feet after the pandemic.

KELLY: What about questions being raised - we all know that student debt is disproportionately held by people of color. President Biden acknowledged as much in his remarks today. Anything you were eyeing as education secretary to target the roots of that inequity?

CARDONA: Certainly. Well, let me tell you first, you know, Blacks are two times more likely - Black Americans are two times more likely to be Pell recipients. So, you know, they're more eligible now for the $20,000 versus the $10,000. And we know that 1 out of every 4 Black Americans will receive total debt cancellation after today's announcement. But that's not good enough because we have a broken system.

So what we're really proud of and what we're working really hard to communicate to the American people is that we're fixing a broken system. We fixed the public service loan forgiveness program that had a 98% denial rate before the president came in office. We've provided over $10 billion in loan relief there. And with regard to equity, income-driven repayment changes that we're making now will make it so that undergraduates won't have to pay more than 5% of their income on loans - paying back loans, which is a change from 10%...

KELLY: Right.

CARDONA: ...Which means that they're not going to be tethered in debt or unable to move on in life because of their loans for school.

KELLY: So you're trying to come at this from different directions.

CARDONA: We are.

KELLY: What about, you know, the big-picture problem, that student debt is massive because college tuition is massive. Anything you can do, anything you're thinking about that makes higher ed less expensive in the first place?

CARDONA: Absolutely. You know, for far too long, higher education has been out of reach for extremely intelligent youth who just feel like, I can't get into this or I can't put my family through this debt. So what we're doing is increasing accountability in higher education. I mean, you see what we've done with some institutions that are taking advantage of students, what we've done with borrower defense. We're fixing a broken system to make it more accessible to more Americans across the country, especially those who historically haven't had an opportunity to go. So we're increasing accountability, return on investment...

KELLY: What about - forgive me, we just have a few seconds left.


KELLY: What about expanding Pell Grants? Would that have an even bigger effect than this debt cancellation?

CARDONA: You know, we're fighting hard to double Pell. And the president, you know, he's been communicating the importance of doubling Pell. We're fighting for doubling Pell - PSLF, public service loan forgiveness - and just making sure the return on investment in higher education is there. And we're going after those places that are using predatory practices to go after students who are trying to chase the American dream.


CARDONA: Their gig is up.

KELLY: U.S. Secretary of Education Miguel Cardona, thanks so much for joining us.

CARDONA: All right. Thank you. Transcript provided by NPR, Copyright NPR.

Mary Louise Kelly is a co-host of All Things Considered, NPR's award-winning afternoon newsmagazine.
Erika Ryan
Erika Ryan is a producer for All Things Considered. She joined NPR after spending 4 years at CNN, where she worked for various shows and CNN.com in Atlanta and Washington, D.C. Ryan began her career in journalism as a print reporter covering arts and culture. She's a graduate of the University of South Carolina, and currently lives in Washington, D.C., with her dog, Millie.