President Biden has indicated he will not write off $ 50,000 in student loans through executive action.
At a CNN town hall on Tuesday night, Biden was asked if he would favor a $ 50,000 student loan forgiveness per borrower, as opposed to the $ 10,000 he publicly backed. “I won’t make it,” the president said in response, suggesting that higher amounts of student debt forgiveness would disproportionately benefit high-income graduates of more elitist private institutions. Biden also suggested that a more generous student loan forgiveness could hamper other related policy goals, such as free community college, because of its cost.
Biden, however, reiterated his support for $ 10,000 in student loan forgiveness, an amount he has consistently supported since his presidential campaign. And he said his administration would support more avenues for a possible loan forgiveness for borrowers with higher student debt, and that he could even cap accrued interest.
Earlier this month, Congress Democrats including Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), Rep. Ayanna Pressley (D-MA) and Rep. Ilhan Omar (D-MN) introduced a resolution in Congress calling on Biden to use executive action to write off $ 50,000 in federal student loan debt for each borrower. Senator Schumer called student debt “a huge anchor for our entire economy” and suggested that canceling $ 50,000 in student loans “would be a huge boost to our economy.”
In addition, more than 300 organizations that advocate for student loan borrowers, including several unions and civil rights groups, have signed an agreement. letter last month, urging President Biden to cancel student debt.
“There is a growing energy and a strong bipartite public support for immediate large-scale debt cancellation, ”the organizations wrote. “Such executive action is one of the few tools available that could immediately boost over 44 million borrowers and the economy.”
Advocates also argue that the massive cancellation of student loans would solve racial injustices. Studies have shown that student debt disproportionate burdens communities of color, and especially black Americans. “Student debt exacerbates existing racial inequalities; the cancellation will help reduce the racial wealth gap, ”the coalition wrote.
Progressive lawmakers and consumer rights organizations have argued that the higher education law gives the president broad powers to release borrowers from their student loans. A specific provision of the law confers on the President, through the Secretary of Education, the power to “enforce, pay for, compromise, waive or release any right, title, claim, privilege or demand, whatever or the acquisition, including any equity or any right of redemption. Several student loan legal experts have argued that using this provision to write off student loan debt is legally valid, even if not everyone agrees.
The White House suggested earlier this month that the administration was considering its legal options for student debt relief through executive action. “The president continues to support the cancellation of student debt to relieve students and families,” said the White House press secretary. Jan Psaki in a statement earlier this month. “Our team is examining if there are steps it can take through executive action.” The administration has made it clear, however, that its preference would be for Congress to pass legislation providing for the cancellation of student loans.
Forgiving $ 10,000 in student loans would be consistent with Biden’s stance on the election campaign, and he argued that it would help target student debt cancellation for low-income people. Forgive $ 10,000 in student loans would eliminate all outstanding student loans for over 16 million people, or one-third of all current student loan borrowers. This level of student loan cancellation would also halve the balances of an additional 9.3 million people. Ultimately, over 50% of delinquent student loan borrowers could benefit from significant relief with just $ 10,000 of student debt cancellation.
Biden’s comprehensive student loan reform plans also included improving existing student loan relief programs, such as forgiveness of public service loans, defending borrowers against repayment, and income-tested repayment. .
On the first day of his term, President Biden issued an executive order extending the current suspension of federal student loan payments, interest, and collections until September 30, 2021.