WILMINGTON, DE - DECEMBER 22: President-elect Joe Biden speaks prior to the holiday at the Queen ... [+] theatre on December 22, 2020 in Wilmington, Delaware. Biden spoke ahead of the Christmas holiday and called the $900 billion coronavirus aid bill passed by Congress on Monday a start, insisting on more economic relief after the inauguration. (Photo by Joshua Roberts/Getty Images) Getty Images
Biden made his first public comments today in response to an ongoing campaign by progressive Democrats and consumer advocates to convince the President-Elect to enact sweeping student loan forgiveness.
Speaking candidly to The Washington Post and others in the media about the challenges he will face in January and the limitations of his executive power, Biden said, “I’m going to get in trouble for saying this . . . it’s arguable that the president may have the executive power to forgive up to $50,000 in student debt... Well, I think that’s pretty questionable. I’m unsure of that. I’d be unlikely to do that.”
Earlier in the day, Biden had reaffirmed his general support for broad student loan forgiveness, but suggested that he would support a smaller amount of $10,000.
Last week, Rep. Ayanna Pressley and other House Democrats introduced a resolution calling on Biden to cancel $50,000 in federal student loan debt for every borrower using executive authority. Senate Democrats, led by Senators Elizabeth Warren and Chuck Schumer, had introduced a similar resolution earlier in the year.
A diverse coalition of 237 civil rights and consumer protection organizations, including the NAACP and several national labor unions, sent a letter to Biden in November, urging him to use executive authority to cancel federal student debt when he assumes office in January.
“President-Elect Biden can— and should— cancel student debt on Day One of his presidency,” said Ashley Harrington, federal advocacy director and senior counsel at the Center for Responsible Lending, at the time.
The organizations, and several Democrats in Congress, have argued that the Higher Education Act provides the President with broad authority release borrowers from their student loans. Some student loan legal experts have argued that using this provision to cancel student loan debt is legally sound. But others have expressed concern that such executive action could face serious legal challenges as an overreach of executive authority.
Forgiving $10,000 in student loans would eliminate all outstanding student loans for over 16 million people, or a third of all current student loan borrowers. That level of student loan forgiveness would also reduce the balances of another 9.3 million people by half. Ultimately, over 50% of outstanding student loan borrowers could see significant relief with just $10,000 in student debt cancellation.
Forgiving $10,000 in student loans would be consistent with Biden’s position on the campaign trail, and Biden has argued that this would help target student debt cancellation to benefit lower-income individuals. Biden’s overall student loan reform plans also included improving existing student loan relief programs such as Public Service Loan Forgiveness, Borrower Defense to Repayment, and income-driven repayment.
Nevertheless, Biden’s comments will disappoint Warren and other consumer rights advocates who have been pushing for broader student loan relief. Warren had also proposed $50,000 in broad student loan forgiveness during her own presidential run, and noted that this level of student debt cancellation could significantly benefit nearly 95% of borrowers.
Student borrower advocacy organizations are not giving up and believe Biden is still persuadable, particularly in light of the recent announcement of his nominee for Secretary of Education, Miguel Cardona.
“We know that hope is not enough,” said Natalia Abrams, executive director of Student Debt Crisis, earlier today. “We will work tirelessly to ensure that Secretary Cardona uses his power and legal authority to cancel student debt on Day One.”
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MawsonAntarctica on December 25th, 2020 at 00:33 UTC »
Refinance. Drop interest rate. Apply all previously paid interest to the principle.
Boom Done.
Controversial_opin on December 24th, 2020 at 22:56 UTC »
Can Biden actually pass an executive order on this? I wasn’t aware you could spend the equivalent of over a trillion dollars without congressional approval.
papabearmormont01 on December 24th, 2020 at 20:11 UTC »
I think we should do a couple of things. The first is refinance everyone’s student debt at the rate of the 30 year treasury, currently about 1.7%. It lowers the interest rate from about 5.8% to 1.7% and spreads out the payments. If you extend the loan term to 30 years instead of 10 and drop the interest rate from 5.8% to 1.7% you change the monthly payment from $440 to $142. Realistically this should help decrease defaults And although the program will inevitably lose money it’s cheaper than total student loan forgiveness. It also helps keep the people that did “save and sacrifice” for their children’s education from getting the short end of the stick. I know that’s a loaded description since not all families have the same opportunities, but it is a problem with student loan forgiveness.
The other thing I would like to see is all colleges and universities have a 1% annualized limit on increases for tuition, fees, and on campus housing imposed for 25 years. You want more money then that? Ask the state and local governments for it. Liberals, myself included, often gripe about the lack of funding relative to the past coming from local levels. This forces the hand of local governments if the universities really do need the additional funding and genuinely can’t cut costs. By limiting to a 1% increase we can hopefully inflate away some of these college costs. It doesn’t fix the problem of 5% annualized increases for 2+ decades like what has been seen where I went to college, but it’s a start that will help the problem over time.
Not a perfect solution, but seems like the most common sense and politically feasible option to me.
Edit: Thanks for the awards kind strangers!! :)
Also I’m sorry for those of you who I couldn’t respond to individually! One thing that has come up a few times. Yes, I support continuing early repayment with no fee at anytime that it suits the borrower and their family. For most people this might be 10-15 years out once they are established in their careers, some it might be later and they can continue with the lower 30 year payment. I’m also fine with the other programs continuing similar to how they function currently, with tweaks and expansions depending on the specific policy