The Biden-Harris administration was an unmitigated disaster for America’s fiscal health. Trillions of dollars in additional deficit spending helped to spur inflation and caused a spike in the cost of financing the debt. While most of this was done through ill-advised legislation, deliberate administrative actions cost more than $1 trillion.
The most expensive and legally problematic of these actions was scheming to transfer student loan debt onto taxpayers. A combination of nine initiatives caused the federal government to forego over $350 billion in offsetting revenues from 2021 through 2024, meaning higher deficits and more debt.
Although courts have blocked some of these policies, some of the Biden-Harris debt transfer elements are still in place. Congress should put an end to these regressive shell games through the reconciliation process. This would both reduce deficits and block any future administration from claiming there is legal ambiguity on the subject.
Addressing Income-Driven Repayment, SAVE, and “Public Service” Forgiveness
A variety of income-driven repayment (IDR) plans put an upper limit on how much a student loan borrower is required to pay back per month. This is sometimes combined with forgiving outstanding debt after a certain period.
IDR was a core element of several Biden-Harris student debt transfers. For example, changes initiated in late 2023 to reduce IDR plan payments and expand forgiveness through more generous terms accounted for roughly $50 billion in write-offs.
The administration rolled out the SAVE plan in early 2024, expanding on IDR changes to an astonishing degree. The Penn-Wharton business model estimated that SAVE would cost over $400 billion in the first decade.
However, the SAVE plan was blatant administrative overreach, and courts have stepped in to block it. The most recent injunction in February 2025 left SAVE as a zombie: not alive, but not fully dead either.
This does not mean Congress can ignore the SAVE situation. Millions of borrowers are unsure about what they need to pay due to changes to loan programs and recent court rulings. Additionally, Congress should assert itself through legislation to make it clear that the people’s representatives have authority over loan programs by definitively ending the SAVE scheme and blocking any further student loan machinations.
Legislators should also address the Public Service Loan Forgiveness (PSLF) program, an IDR plan for government and nonprofit workers. If workers make student loan payments for 10 years, the remaining debt is written off. That’s a big deal: PSLF participants receive over $65,000 in debt forgiveness on average. This is even more generous than the Pell Grant program, which is targeted towards those from disadvantaged backgrounds.
The Biden-Harris administration also sweetened PSLF by issuing waivers to expand eligibility (including people with non-IDR loan plans), counting temporary payment deferrals as payments, and waiving the statutorily mandated income test.
Congress should not only undo the changes to PSLF but also consider ending it.
The PSLF overwhelmingly benefits financially secure white-collar households. Government workers receive generous compensation thanks in part to fringe benefits that are much higher than their private sector counterparts and historically have tremendous job security, so they are not unduly struggling.
There is no fundamental reason why Washington should give bonus handouts to bureaucrats and NGO staffers. If the PSLF went away, they would still be eligible for the same IDR plans as everyone else and taxpayers would save tens of billions.
If there is going to be a federal IDR program for student loans, it should be based on clear law rather than ad hoc administrative actions. Congress should streamline IDR with clear terms and remove the unwarranted changes made during the Biden years. Ideally this would be done with an eye towards lowering federal deficits, reducing the inflationary subsidization of college tuition, and eliminating favoritism.
Budgetary Impact of Student Loan Programs
CBO counts changes to the cost of federal student loan programs as taking place immediately. Eliminating the Biden-Harris write-offs through reconciliation could thus reduce deficits for the fiscal year in which the repeal is enacted by hundreds of billions of dollars. (Conversely, the full costs of the Biden policies were booked as higher deficits when those programs were created in 2023 and 2024.)
The Right Thing to Do
However, even if the budgetary savings were negligible, it would still be a moral imperative for Congress to rectify the situation. Americans who decided to avoid the expense of attending a university are being unjustly burdened with the student loan debt of strangers, many of whom deliberately avoided paying down their balance to take advantage of federal “forgiveness” loopholes. This is intolerable and warrants decisive action by the people’s representatives.
