Is a $ 50,000 student loan forgiveness still possible?
Last week, President-elect Biden claimed he would push Congress to pass $ 10,000 in student loan cancellation for borrowers.
Biden’s stance is consistent with what he touted during the election campaign, but it falls short of what advocates for student loan borrowers and their allies in Congress have called for.
Last month, Representative Ayanna Pressley (D-MA), along with several other progressive House Democrats, introduced a resolution calling on Biden to write off $ 50,000 in federal student loan debt for every borrower using executive power. “Large-scale student debt cancellation is precisely the kind of bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expects to implement,” said declared Pressley said in an earlier statement.
The Pressley House resolution mirrored a similar resolution presented to the Senate by Senators Elizabeth Warren (D-MA) and Chuck Schumer (D-NY) in September. Warren and Schumer also called on Biden to write off $ 50,000 in student loan debt for each borrower. Their resolution was supported by a diverse coalition of more than 200 civil rights organizations and consumer groups. “President-elect Biden can – and should – cancel student debt on the first day of his presidency,” said Ashley Harrington, federal director of advocacy and senior counsel at the Center for Responsible Lending at the time.
A blanket rebate of $ 10,000 per borrower on student loans would be unprecedented and would have far-reaching implications. It is estimated that 16 million student loan borrowers, or about a third of all student loan borrowers, are said to be debt-free. Another 9 million borrowers would see their student loan balances cut in half. The end result would be dramatic, affecting half of all current student loan borrowers.
But for many others, $ 10,000 wouldn’t do much to address the student debt burden. During her presidential race, Senator Warren claimed that her plan to give a $ 50,000 student loan rebate to borrowers earning less than $ 250,000 per year would impact 95% of all student loan borrowers. , a much more ambitious proposal. Many of these borrowers would reap marginal benefits from a much smaller student loan discount.
Biden has not expressed strong opposition to more ambitious student loan cancellation proposals, but he said it would be “unlikely” to support a figure of $ 50,000, at least through executive action.
Congress could pass legislation allowing for a more widespread forgiveness of student loans, but with tight margins of control in both the House and Senate, it’s unclear whether Democrats would have the vote. Senator Joe Manchin, a moderate Democrat from West Virginia, recently expressed concerns about other expensive stimulus proposals such as a new round of $ 2,000 stimulus checks; It’s unclear whether he would support hundreds of billions of dollars in additional student loan cancellations.
Biden has expressed support for other mechanisms to cancel student debt, such as expanding the distressed civil service loan forgiveness program, rescinding new regulations limiting relief under the program defending borrowers with repayment; improving income-oriented repayment plans; and easing restrictions on student loan release in bankruptcy.
Nonetheless, advocates for student loan borrowers are not giving up.
“Right now, with so many people struggling economically due to the COVID pandemic, providing this relief valve would both be extremely beneficial for these borrowers and allow them to recover from this pandemic and the economic crisis, much faster and more completely, ”said Persis Yu, director of the National Consumer Law Center’s Student Loan Assistance Project, in a statement to The hill.
“Joe Biden can – and must – take bold action to respond to the impacts of the pandemic, stimulate the downturn in the economy and close the racial wealth gap,” said Natalia Abrams, executive director of Student Debt Crisis. “Yes, Biden’s comments are of concern, but a comment is not policy. We will continue to build a broad coalition to push the Biden administration to write off $ 50,000 or more in student debt in accordance with the resolution presented by Senate Minority Leader Chuck Schumer and Senator Elizabeth Warren. “