President Biden is close to a decision on whether to enact a sweeping student loan decree. But the debate over how far he should go continues. Here’s the latest.
Top proponents are urging Biden to make it big on student loan forgiveness
At a roundtable on student loan forgiveness on Wednesday, union leaders and top Democrats — including Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) — continued to urge President Biden to give $50,000 in student loans USD or more to enact cancellation.
“Borrowers can’t do all the things that people look forward to because that damn payment is on their backs every month,” Schumer said at the roundtable. Senator Warren also chimed in, asking Biden to pay off $50,000 in student loan debt for borrowers. Both senators have been calling on Biden to make student loan forgiveness big for over a year.
Biden appeared to decline to cancel student debt of $50,000 or more for any borrower. At a news conference in April, he told reporters, “I’m not considering $50,000 in debt reduction.” He has since expressed no further openness to larger amounts of student debt relief.
But Schumer and others at today’s roundtable seemed undeterred. “Let’s fight and survive until we can cancel $50,000 in student debt,” Schumer said.
Biden may agree on $10,000 in student loan forgiveness, but proponents say it’s not enough
Biden has recently been more open about enacting $10,000 in student loan forgiveness, a figure he would support during his 2020 presidential campaign. But student loan advocates say it won’t be enough.
Last week, a coalition of 60 civil rights groups, faith-based organizations and consumer advocacy groups wrote to President Biden, urging him to reconsider his position on the $50,000 student loan forgiveness. The group pointed to studies showing larger amounts of student loan cancellations would help close the racial wealth gap.
“The signatories … call on you to use Executive Branch powers to forgive $50,000 of federal student loan debt per borrower to boost the economy, bridge the racial wealth gap and alleviate the financial suffering of millions of Americans, including black people women, to alleviate. ‘ the coalition wrote. “While women carry about two-thirds of college debt, black women are more than twice as likely as white men to owe more than $50,000 in college student debt.”
“Cancelling $50,000 in student loan debt is the minimum required to address the racial wealth gap,” said Jaylon Herbin, policy and outreach manager and director of student loans at the Center for Responsible Lending (CRL). “Student debt impacts most negatively on those who have historically been marginalized by systemic inequalities that have continued to grow. President Biden can and should use executive branch authority to maintain the administration’s commitment to serving communities of color and women who deserve the ability to achieve their American Dream.”
Earlier this month, NAACP President Derrick Johnson said $10,000 in student loan forgiveness was a “slap in the face” to borrowers. “The black community will be watching closely when you make your announcement, but $10,000 is not enough,” he said in a statement. “President Biden, the issue isn’t whether you can do it, it’s whether or not you have the will to do it.”
Forgiving $10,000 in student loans for each borrower would eliminate student debt for over 16 million borrowers, according to the Center for American Progress. But canceling $40,000 or more in student debt for each borrower would wipe out student loans for over 35 million people, accounting for nearly 80% of all borrowers.
Biden may impose other restrictions on student loan forgiveness
The White House has emphasized that Biden has not yet made a decision on student loan forgiveness. And it could very well choose not to act, relying instead on increasing its targeted student loan forgiveness initiatives. The Department of Education has indicated that $25 billion in student loan cancellations has already been approved under these new program expansions.
If Biden goes ahead with large-scale student loan forgiveness, he can impose limits based on income. Recent reports suggest the administration is heavily considering limiting the relief to borrowers earning less than $150,000 a year. Proponents fear such income limits could complicate the implementation of the loan forgiveness by requiring borrowers to submit a positive application – leading to potentially lengthy bureaucratic delays and allowing the most vulnerable borrowers to slip through the cracks in the system.
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