What I wrote in the NYT about student debt forgiveness
And some other observations about what happens next
With Pam Herd, I wrote about the Biden student loan relief process in the New York Times this weekend. You can read an ungated version of the article here and the text of the piece is below the graphic, which I love. After the article, I offer some thoughts about what happens next.
Applying for Student Loan Debt Relief Is Easy. Imagine That.
The Biden administration unveiled its student loan forgiveness application online a week ago. Twitter lit up with joyful posts about debt relief, as well as about the surprisingly easy process.
“Incredible. Took about 120 seconds.”
“Super easy and painless. I feel so hopeful!”
Twenty-two million people submitted applications during the first week the website was open, eight million of them over the first weekend, a startling contrast to the six people (not six million, nor 6,000 — just six) who successfully negotiated the Obamacare website on the day of its launch in 2013. As professors of public policy, we have shared our research on how administrative burdens make vital public services harder to access with the Biden administration, and we spoke with Department of Education officials about how many people might participate in the program (though we played no role in helping design this process or the application itself). Even so, it was astonishing for us to see just how simple it is to apply for debt relief.
Other aspects of the situation are less simple. Student loan forgiveness is subject to intense political disagreement and multiple lawsuits. On Friday, a federal appeals court issued a temporary stay that halted the potential discharge of debt. But borrowers can still submit applications and the Biden administration immediately made it clear that it would like them to do so. “The order does not reverse the trial court’s dismissal of the case or suggest that the case has merit,” Karine Jean-Pierre, the White House press secretary, said.
Setting aside the conflict over policy, the streamlined application shows what is possible when government prioritizes the public in the delivery of public services. The form can be completed in just a couple of minutes. It works on both a computer and a smartphone, and it is available in Spanish and English. It’s three simple pages: a welcome page, a form and a confirmation page on which applicants attest that they are eligible. Beneficiaries do not have to create an account with a password, a seemingly small step that can actually discourage people from starting. Applicants need five pieces of information: name, social security number, date of birth, phone number and email address. That’s it.
This simplicity is no accident. It represents a series of choices informed by design principles that focus on how applicants experience the process. It’s a sharp contrast from how we normally think about government: confusing forms, hours spent tracking down documents to provide information that the government often has already, all accompanied by the feeling that the people on the other side of the screen are making it hard on purpose.
A deeper look at the choices made by the Biden administration in putting together the student loan forgiveness application illustrates both why overly complicated processes often became the norm and how to simplify more of them.
Eligibility criteria is a key source of what we call administrative burden, the onerous experiences we have when trying to access government benefits and services. In the case of student loan debt relief, President Biden put an income cap of $125,000 for an individual or $250,000 for a household.
For programs like Medicaid and SNAP, better known as food stamps, the individual applying has to gather and document income to prove eligibility. An individual applying for student loan debt relief has a different experience. Borrowers don’t submit income documentation. They simply attest that they’re eligible. The Department of Education chose the principle of trust, but verify. It will confirm eligibility with its administrative data and can ask applicants for more documentation in cases where income claims look suspicious. Since the government is not sending any money out — it is adjusting the debt level of verified borrowers — the risk that ineligible people will receive government benefits is minor.
The process, however, could have been even simpler. If the Department of Education had access to I.R.S. data to verify income, it could have automatically forgiven debt for all eligible borrowers. But federal law discourages such data sharing, even when it can help people. The result is that between 10 percent and 25 percent of eligible individuals may never receive the relief, often because they are unaware of or confused about this one-off benefit. This needs to change.
Privatization of public services is another invisible source of administrative burdens. Just ask a Medicare beneficiary or someone trying to pick an Affordable Care Act plan. In the case of the Public Service Loan Forgiveness program, which discharges loans for those who engage in professions like teaching, private lenders have made it confusing and onerous, which helps explain why many borrowers have had terrible experiences. While clearer legislation and more aggressive oversight by the Department of Education could have helped, ceding responsibility to a labyrinth of private lenders, who have little incentive to enroll individuals, is a recipe for failure.
By one estimate, $100 billion in relief under that program is outstanding to more than 3.5 million borrowers. Even those who successfully navigated the system spent enormous amounts of time and emotional energy doing so. By cutting private lenders out of the process for its new student relief program, the federal government radically simplified the situation.
We pay a lot of attention to government failures. But if we want better outcomes, we must celebrate and learn from the wins, too.
Student loan relief is proof of concept for a better approach to public service delivery, reflected in a Biden administration executive order that puts the public rather than bureaucracy at the center of attention. For this approach to work across all government programs, however, requires real investments in user experience, from digital to in-person encounters. It also requires policymakers to think about how to minimize burdens in policy design. This includes eliminating the complexity and confusion created by privatization and enabling the use of administrative data to simplify processes.
Whether you agree or disagree with student loan debt forgiveness, you should feel encouraged by how it is being delivered. Across our political divides, we hold a shared interest in replacing long, confusing and often baffling procedures with simple, intuitive experiences built to serve the needs of the public. The new student loan relief process does more than help a specific group; it offers us a model for how government can serve us all.
What happens next with student loan forgiveness?
Thats the piece!
A couple of additional observations.
I am grateful to the NY Times for publishing this for two reasons. First, it is incredibly hard to draw attention to government successes because the public and therefore media and government are naturally more drawn to stories of government failure, what I have written about before as negativity bias. In general, it is easier to find an audience for stories of government wasting resources. Stories of positive outcomes are greeted skeptically. I don’t think there is anyway to change this, but it is important to highlight and praise what works.
Second, as the piece was being finalized on Friday night, the the Eighth Circuit ordered a halt to the process while Republican Attorney Generals could launch an appeal. The editors could have benched the piece while the court decision (and other cases) played out, but they didn’t. Regardless of the outcome of the court case, it remains worth lifting up this application process as a model for how to improve government.
As for the the case itself, the legal basis for standing here seems incredibly thin.
That said, I honestly don’t know what the outcome will be. If we have learned anything in the last few years is that motivated judges are willing to ignore precedent in how they treat such issues.
It is striking how much skill and expertise goes into adversarial legalism. A lot of smart people spend their energy arguing to prevent government from doing good things rather than actually making government work.
One thing that is clear is that the legal uncertainty does not help the Biden administration provide clear messaging on student loan forgiveness. The current message is “we can’t discharge the loan, but you should still apply.” Not ideal.
The court injunction certainly throws sand in the gears of a rollout that was going extraordinarily well. Department of Education officials were expecting thousands of applications during the beta launch, but got 8 million between Friday evening and Monday afternoon, seemingly without any major hitches.
Indeed, the smooth rollout seems to have inspired the Biden administration to move ahead and make the application live earlier than planned. They were hoping to start discharging loans within this past weekend before the de facto court injunction. Now we wait and see. The court could issue a ruling within days, either a more formal injunction to debate the merits of the case, or a dismissal.
If the case is dismissed, and the Biden administration starts forgiving loans, the facts on the ground have changed. People will start tweeting not about an easy process but about newly reduced loan balances. At such point, it is hard to imagine any court telling the Department of Education to reclaim benefits already provided.
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This is great. What is your source for the 22 million applications so far? Is there a way to track this?