Biden to announce decision on student loan debt affecting millions of borrowers
WASHINGTON — President Biden will announce a decision on Wednesday about his plans for student loan debt relief, a highly anticipated moment that could affect about 45 million borrowers nationwide, according to people familiar with the matter.
Although details of the plan are still being finalized, White House aides have said Mr Biden was weighing a targeted plan that would provide $10,000 in debt relief for borrowers below a certain level of income. Will do
Mr Biden is also expected to extend a pause on loan payments to all borrowers, a Trump-era program that has been in effect since the start of the pandemic.
Mr Biden has faced calls to cancel student loans throughout his presidency, driven by borrowers and the progressive wing of his Democratic Party. He endorsed the idea on the campaign trail in 2020, saying: “I’m going to make sure everyone in this generation gets $10,000 off their student loans as we try to get out of this horrific pandemic.” Huh.”
But White House aides say the president has scoffed at the decision, questioning whether the cancellations should apply to students at both public and private universities, and said he does not want the relief to be imposed on higher-income earners. be applicable.
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The decision will spark debate in Washington — and within the Democratic Party — about economic fairness and the potential for inflation to hit a 40-year high.
Mr Biden had promised a decision by the end of the month, but he is expected to return to the White House on Wednesday from Delaware, where he is on vacation with his family.
“The president will have more to say on this before August 31,” White House spokesman Abdullah Hassan said. “No one has had to pay a single penny in student loans with federally held debt since President Biden took office.”
Mr Hassan also noted that the Biden administration has “already canceled nearly $32 billion in debt for more than 1.6 million Americans,” a reference to actions to revive and expand targeted relief programs, Which stopped working during the Trump administration.
The Biden administration has wiped out debt for qualified public service workers, permanently disabled borrowers, fraudulent students and people whose schools were suddenly closed while they were enrolled.
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Mr Biden’s decision is likely to attract criticism from the left and right. The debt Mr Biden is considering canceling does not go as far as progressive groups, including many Democratic lawmakers and racial justice advocates, have sought. New York Senator Chuck Schumer, the majority leader, other influential Democrats and several civil rights organizations have pushed for Biden to forgo $50,000 per borrower.
White House officials have been preparing quietly for months for the possibility that Mr Biden will eventually decide to combine targeted loan forgiveness with a final restart of payments.
Administration officials say the combination of resuming payments while waiving loans for a target group will not add to rising prices and that the relief will help low-income borrowers struggling for rising food and rents. are.
But Republican and some Democratic economists say the policies will add to inflation by giving consumers more money to spend.
NAACP President Derrick Johnson said on Tuesday that “we have a problem” if Mr Biden goes ahead with a plan to provide relief with the income limit of just $10,000.
“Sadly, we have experienced this many times before,” Mr Johnson said in a statement, noting the Senate’s failure to pass police reform. “President Biden’s decision on student loans cannot become the latest example of a policy that has left black people — especially black women — behind.”
There is no way to treat the record number of black voters who turned out to be a possible plan to save democracy in 2020, he said.
Republicans have called any loan cancellation largely a handout to high-income college graduates. Some economists have warned that this could prompt colleges and universities to raise tuition prices in anticipation of future debt relief.
The Office of Congress, outside groups and even companies that service federal student loans have been left to speculate on Mr. Biden’s final move.
Scott Buchanan, executive director of the trade group Student Loan Servicing Alliance, said Monday, “We haven’t heard whether they’re looking at waivers or pay breaks, or both.” “I do not know what the plan is, nor have the officials been consulted on how they will do it and whether it is possible to implement. It’s my deepest fear – that they announce something here and it’s not worth doing.”
Erica L. Green contributed reporting.