Several people familiar with the government’s talks stressed that Biden had not made a final decision late Tuesday night on key elements of the debt relief program. The president left his vacation home in Rehoboth Beach, Del., Wednesday morning to return to the White House pending an announcement.
Senate Majority Leader Chuck Schumer, a leading proponent of student debt forgiveness, urged Biden to relieve borrowers as much as possible during a phone call with the president on Tuesday night, according to a Democrat familiar with the discussion.
Schumer told Biden in his final pitch that debt forgiveness is “the right thing to do morally and economically,” the Democrat said.
The call followed a discussion senior White House officials, including Chief of Staff Ron Klain, had with Schumer and Sens. Elizabeth Warren (D-Mass.) and Raphael Warnock (D-Ga.), the leaders of the bid to convince Biden to waive student loans since he took office.
The 11th-hour deliberations on debt relief come as the White House stares down a self-imposed deadline for addressing the issue. The pandemic-related moratorium on interest and payments, which began in March 2020 in the Trump administration and has been extended four times by Biden, will expire on August 31.
Progressives, civil rights groups and unions have all urged the Biden administration to provide large sums — as much as $50,000 per borrower — in loan forgiveness to people across the board. And they expressed disappointment on Tuesday at any policies that fail to provide far-reaching relief.
Derrick Johnson, president of the NAACP, made it clear that $10,000 in debt relief per borrower would be insufficient to address the racial disparities in student loan debt. “If the rumors are true, we have a problem,” Johnson said in a statement.
“President Biden’s decision on student debt cannot become the last example of a policy that leaves black people – especially black women – behind,” he added. “This is not how you treat black voters who came in record numbers and gave 90 percent of their votes to save democracy again in 2020.”
The government is widely expected to at least extend the student loan freeze to prevent tens of millions of borrowers from receiving bills just before the midterm elections. A large number of Congressional Democrats have urged the White House to extend the freeze until at least the end of the year.
The White House has been grappling with the issue of student debt forgiveness for more than a year. During his campaign, Biden pledged to forgive up to $10,000 to all federal student loan borrowers and came under tremendous pressure from progressives to keep that promise.
Many of the key parts of the student debt forgiveness plan seem undecided, including which loans and borrowers qualify. White House officials have debated a $125,000 income cap as a way to assuage criticism that forgiveness policies help those with higher incomes.
Education Department officials, pending a final decision from the White House, have been developing plans to implement whatever Biden ultimately decides. The department has been exploring ways to automatically provide as much assistance as possible without requiring borrowers to fill out an application form.
The White House declined to comment on debt relief plans on Tuesday.
The White House’s indecision has frustrated progressives and other groups who are urging Biden to go as big as possible on widespread loans to tens of millions of people before going to the polls this fall.
The uncertainty of whether monthly payments would also restart led to sharp criticism of the loan service companies that administer federal student loans.
The Student Loan Servicing Alliance, which represents federal student loan service providers, warned the Ministry of Education Monday that the government’s indecision risked “operational disruptions” to the repayment system.
Education Ministry officials have previously told loan managers to wait to send borrowers’ bills about their payments that will resume in September. But the companies say the uncertainty so close to the deadline is pushing the refund system to the brink of major trouble. That includes the possibility of automated messages sending incorrect information to borrowers in the coming days, even if the administration decides to extend the waiver.