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For millions of student loan borrowers, the lucky break that might evaporate

If President Biden’s plan to cancel student loan debt is scuttled, millions of borrowers will be back where they started. And some will be even further back than that.

Student loan borrowers protested outside the Republican National Committee in November.Paul Morigi/Getty Images for We The 45 Million

Tens of millions of Americans who thought they’d gotten a huge and unexpected break suddenly can’t be sure.

In August, President Biden told those laboring under obscene amounts of student loan debt that if they earn less than $125,000 per year, they would be eligible to have at least $10,000, and possibly up to $20,000, of that debt forgiven. Since then, 26 million people have applied for that relief, and 16 million have been approved so far.

But now they’re in limbo, as a slew of Republican-led legal challenges claiming that Biden’s order exceeds his powers have frozen the loan forgiveness program, and threaten to scuttle it altogether.

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If that happens, most of those millions of people will be right back where they were before, facing the same financial burdens.

However there is one group of borrowers who would be not just back where they started, but actually worse off than if the president had never attempted loan forgiveness in the first place. And the only thing they did to deserve it was to be born too early.

Emily Fitzmaurice is one of them.

Fitzmaurice, 35, works to make higher education more equitable as policy director for the Hildreth Institute, a Boston nonprofit focused on putting college within reach of those who need it most. She graduated from Fairfield University in Connecticut in 2009 with a whopping $100,000 in loans. Some of them were private, and some were federal loans under the Federal Family Education Loan, or FFEL, program, essentially federal money, but administered by private companies. When Fitzmaurice went to college, most student borrowers had FFEL loans. About 4 million of those loans are still outstanding.

In 2010, the Obama administration cut out the middlemen and issued Direct Loans to new borrowers instead. In a failure of federal policymaking, however, FFEL borrowers became second-class citizens, excluded over the years from programs designed to make loans less burdensome — just because they happen to have gone to college before the shift.

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So Fitzmaurice got no breaks and kept chipping away at her mountain of debt, with payments as high as $800 per month at one point. When Biden announced debt relief, she had seven years left on her loans, with total payments of $20,000 to go, including interest.

At first, the president’s order excluded FFEL borrowers. Then they were advised they would in fact be eligible for relief, but only if they consolidated their FFEL loans into new Direct Loans. So that’s what Fitzmaurice did right away. She applied for relief and was notified her entire remaining balance would be wiped out.

Then the ground shifted and the program was suspended. To head off a legal challenge based on FFEL borrowers’ inclusion in the debt relief program, the federal government quietly pulled the rug out from under those borrowers, excluding those who failed to begin consolidating their loans before Sept. 29. Now the Biden administration must find another way to give them relief.

But even though she made it under the wire, Fitzmaurice, too, will be in trouble if the courts strike down Biden’s debt relief plan. Her new Direct Loan restarts the clock, and carries a higher interest rate and a longer term than the remainder of her previous loans. If it is not canceled, and she is unable to prepay it, it will end up costing her a total of $39,000 over 20 years.

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“I just felt this weight off my shoulders when they announced we would qualify for forgiveness if we did this consolidation,” she said. “Now that weight is back on, and it is so much heavier.”

Thirteen years and $19,000 heavier, to be exact.

Her work reminds her every day that others have way more debt than she, and will struggle more to pay it. She knows many borrowers are paying off loans for degrees they never even got. This country’s higher education financing system is truly diseased.

Still, if the courts kill debt relief, Fitzmaurice, and many thousands of borrowers like her, could be not only denied the help they were hoping for, but also further burdened by a promise the president could not keep.

If that happens, Biden’s Education Department must find a way to make Fitzmaurice, and others like her, whole. Otherwise, the president’s defeat will become a political disaster for him, and a financial one for the millions he had hoped to help.


Globe columnist Yvonne Abraham can be reached at yvonne.abraham@globe.com. Follow her on Twitter @GlobeAbraham.