We talk a lot about big, sweeping policy changes because those are the kind of things that make for easier narratives. “All student debt should be forgiven” is a relatively easy slogan, but as we recently saw with the supreme court decision, even a toned down version of that can be somewhat more effectively opposed.

Bureaucratic fixes and streamlining is something that gets much less attention. Bureaucracy and bureaucrats are often cast as the villains in education when people point to ballooning administrative costs, and whenever politicians talk about them, it is usually to discuss how to wipe away a massive number of them to save money or time. But our modern system is far too complicated to effectively work when institutional knowledge is treated that way.

Because the reason for the bureaucratic expansion is that schools are expected to do far more than they ever were in the past. There is such a big bureaucracy around student loan debt because the amount of debt is so much higher than it has ever been. But the system was allowed to balloon without pruning or oversight, and without anyone clearing out the spider webs.

Since Biden took office, one of the biggest changes to student loan debt has been a consolidation of service providers and a more structured tracking of payments. For years, many who qualified for Public Student Loan Forgiveness (PSLF) of some sort, would only receive it if they were aware that their loans should be canceled. Many service providers were doing very little diligence on how much the students actually owed. Planet Money even did a deep dive on this when a whistleblower came forward during the Trump administration.

So Biden has collapsed a lot of the servicers, taking away accounts from servicers who were doing a poor job tracking how much borrowers had paid and whether they qualified for PSLF. He has also forgiven debt that was given to for-profit colleges who used predatory techniques, like those detailed in the Last Week Tonight segment on student debt.

In total now, approximately $116 billion has been forgiven. This should not be seen as an alternative to the $400 billion debt relief that the supreme court struck down, because many people would have qualified for both, but simply another avenue that Biden is taking to tackle the problem of student debt before the Dept. of Education starts reporting missed payments to credit bureaus in late 2024.

Because, no matter what, that is going to be a tough time for the American economy.

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