President Biden is nearing a decision on whether to enact broad student loan forgiveness. But the debate continues over how far he should go. Here’s the latest.
Top Advocates Call On Biden To Go Big On Student Loan Forgiveness
At a student loan forgiveness roundtable on Wednesday, labor union leaders and top Democrats — including Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) — continued to urge President Biden to enact $50,000 or more in student loan cancellation.
“Borrowers can’t do all the things people look forward to because every month that damn payment is on their backs,” said Schumer at the roundtable. Senator Warren chimed in as well, urging Biden to wipe out $50,000 in student loan debt for borrowers. Both senators have been calling on Biden to go big on student loan forgiveness for over a year.
Biden seemed to dismiss cancellation $50,000 or more in student debt for every borrower. At a press conference in April, he told reporters, “I am not considering $50,000 in debt reduction.” He has not since expressed further openness to larger amounts of student debt cancellation.
But Schumer and other attendees at today’s roundtable seemed undeterred. “Let’s fight and persist until we succeed in canceling $50,000 in student debt,” Schumer said.
Biden May Settle on $10,000 in Student Loan Forgiveness, But Advocates Say That’s Not Enough
Biden has expressed more openness recently to enacting $10,000 in student loan forgiveness, a figure he said he would support during his 2020 presidential campaign. But advocates for student loan borrowers say that would not be enough.
Last week, a coalition of 60 civil rights groups, faith organizations, and consumer advocacy groups wrote to President Biden, urging him to reconsider his position on $50,000 in student loan forgiveness. The group noted studies showing that larger amounts of student loan cancellation would go further to closing the racial wealth gap.
“The undersigned… urge you to use the authority of executive action to cancel $50,000 of federal student loan debt per borrower to stimulate the economy, bridge the racial wealth gap, and alleviate the financial suffering of millions of Americans, including Black women,” wrote the coalition. “While women carry around two-thirds of student debt, Black women are more than twice as likely as white men to owe more than $50,000 in undergraduate student loan debt.”
“Cancelling $50,000 in student loan debt is the minimum needed to begin addressing the racial wealth gap,” said Jaylon Herbin, policy and outreach manager and student loan lead at the Center for Responsible Lending (CRL). “Student debt most negatively impacts those historically marginalized through systemic inequalities that have only continued to grow. President Biden can and should use the authority of executive action to uphold the administration’s commitment to helping communities of color and women, who deserve the ability to build their American dream.”
Earlier this month, NAACP President Derrick Johnson said $10,000 in student loan forgiveness would be 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, it’s not about whether you can do it, it’s about whether or not you have the will to do it.”
Enacting $10,000 in student loan forgiveness for every borrower would eliminate the student debt for over 16 million borrowers, according to the Center for American Progress. But cancelling $40,000 or more in student debt for every borrower would wipe out the student loans for over 35 million people, representing nearly 80% of all borrowers.
Biden May Impose Other Restrictions On Student Loan Forgiveness
The White House has emphasized that Biden has not made a decision yet on student loan forgiveness. And he could very well choose to not act, relying instead on beefing up his targeted student loan forgiveness initiatives. The Education Department has indicated that $25 billion in student loan cancellation has already been approved under these new program expansions.
If Biden does proceed with wide-scale student loan forgiveness, he may impose restrictions based on income. Recent reporting suggests that the administration is strongly considering limiting relief to borrowers making less than $150,000 per year. Advocates worry that any such income limits could could complicate the implementation of loan forgiveness by requiring borrowers to affirmatively apply — resulting in potentially lengthy bureaucratic delays, and the most vulnerable borrowers falling through the cracks of the system.