Biden Opens the Student Debt Relief Application, With a Fraud Warning (October 17, 2022)

On October 17, 2022, President Biden spoke in the South Court Auditorium next to the White House to formally open the online application for his student debt relief plan. Announced less than eight weeks earlier, the plan would cancel up to $10,000 in federal student loan debt, or up to $20,000 for borrowers who had received a Pell Grant, for people earning less than $125,000 a year [1]. This short clip shows the warning he gave about scams. The video’s title says he read the fraud-reporting address wrong; as explained below, he did not. All quotes are from the official transcript published by the American Presidency Project [1].

Key Moments

”Hang up”

Biden warned borrowers that scammers would try to exploit the program. “If you get a call pretending they’re from the Government trying to help you with your loans, let’s be clear: Hang up. You never have to pay for any Federal help from the student loan program,” he said. “You’re going to get calls: ‘If you do this, it will pay that. You can get relief.’ That’s fraud. If you get any questionable calls, please tell us by going to reportfraud—reportfraud—d-o-t—FTC.gov.” The official transcript notes the address as reportfraud.FTC.gov. “My message to fraudsters looking to cheat the American people is: Don’t do it. We’re going to hold you accountable."

"No forms to upload”

The application, at studentaid.gov, asked for a name, Social Security number, date of birth and contact information. “No forms to upload. No special login to remember,” Biden said. “It takes less than 5 minutes.” He said a weekend test version had “handled more than 8 million applications without a glitch or any difficulty.” Asked how many people had applied through the test site, Education Secretary Miguel Cardona answered: “Over 8 million people."

"Not a dime will go to those in the top 5 percent”

Biden said “more than 40 million Americans can stand to benefit from this relief, and about 90 percent—90 percent—of that relief is going to go people making less than $75,000 a year.” He criticized Republican officials who opposed the plan, including members of Congress who had received pandemic Paycheck Protection Program loans, and said “we’re able to afford this student loan relief.” He also said the pandemic pause on loan payments would end: “Come January, folks have to start to repay their student loans” if they did not qualify for relief.

”Litigation is underway”

Asked whether lawsuits could stop the program, Biden said: “Litigation is underway. And I don’t think our legal judgment is that it won’t. But they’re trying to stop it.”

Fact Check

“reportfraud … d-o-t … FTC.gov.” Correct. ReportFraud.ftc.gov is the Federal Trade Commission’s site for reporting scams, launched in October 2020 [2]. Biden repeated a word, but the address he gave was right, and the transcript renders it that way [1].
“We’re able to afford this student loan relief.” The Congressional Budget Office estimated in September 2022 that the cancellation would cost about $400 billion over 30 years and would add to the deficit [3].
“Come January, folks have to start to repay.” That did not happen. In November 2022, with the program blocked in court, the administration extended the payment pause into 2023 [5]. The pause ended only after Congress barred further extensions in the June 2023 debt-limit law, and payments resumed in October 2023, three and a half years after the pause began [8].
“More than 8 million applications without a glitch.” This was the administration’s figure, and Cardona gave the same number at the event [1]; we did not find independent data on the test site’s performance.

What Happened Next

A Texas ruling: On November 10, 2022, U.S. District Judge Mark Pittman declared the program unlawful and vacated it, calling it a “complete usurpation” of congressional authority. “In this country, we are not ruled by an all-powerful executive with a pen and a phone,” he wrote. The Education Department had been on track to approve cancellation for 16 million borrowers [4]. It stopped taking applications and said it would hold those of the roughly 26 million people who had applied [6].
The states’ suit: Six states also sued, and the U.S. Court of Appeals for the Eighth Circuit issued a nationwide injunction [7].
The Supreme Court: On June 30, 2023, in Biden v. Nebraska, the Court ruled 6–3 that “the HEROES Act provides no authorization for the Secretary’s plan,” which would have canceled “about $430 billion in debt principal.” Chief Justice John Roberts wrote for the majority; Justice Elena Kagan wrote the dissent, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson [7].