Student Loans: President Biden to announce $10,000 in debt cancellation for many, extend repayment pause: sources

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WASHINGTON — Millions of Americans awaited the fate of their federal student debt on Wednesday as President Joe Biden prepared to fulfill his campaign promise to provide up to $10,000 in debt forgiveness.

Details of the plan have been closely watched, but borrowers making less than $125,000 a year are eligible for loan waiver, according to three people familiar with the decision. Biden also plans to pause payments on federal student loans through January.

If it survives the legal challenges that will almost certainly come, Biden’s plan could be a windfall for some of the nation ahead of this fall’s midterm elections. More than 43 million have a combined $1.6 trillion in federal student debt, with nearly one-third less than $10,000, according to federal data.

Still, the move is unlikely to excite any of the factions vying for influence, as Biden weighs in on how much to cancel and for whom.

Biden has faced pressure from liberals to increase support for hard-hit borrowers, as well as moderates and Republicans who have doubts about the fairness of widespread forgiveness. The delay in Biden’s decision has only heightened expectations for what his own aides recognize as a political no-win situation. People spoke on condition of anonymity to discuss Biden’s intended announcement in advance.

The continuation of the pandemic-era payment freeze comes just days before millions of Americans would know when their next student loan bills are due. This is the closest the administration has come to the end of the payment freeze extension, with the current pause set for August 31.

Wednesday’s announcement was for the White House after Biden returned from vacation in Rehoboth Beach, Delaware. The government had briefly considered higher education schools in the president’s home state for a bigger disclosure, but scaled back their plans.

During the 2020 presidential campaign, Biden was initially skeptical about canceling student loan debt as he faced more progressive candidates for the Democratic nomination. Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., had suggested cancellations of $50,000 or more.

While trying to bolster support among younger voters and prepare for a general election campaign against President Donald Trump, Biden unveiled his initial $10,000 debt forgiveness proposal per borrower, without mentioning an income cap.

Biden narrowed his campaign pledge in recent months by embracing the income cap as rising inflation took a political toll and as he wanted to avert political attacks that the cancellation would benefit those with higher home wages. But Democrats, from members of the congressional leadership to those facing tough re-election bids in November, have pushed the government to go as broad as possible with debt relief, seeing it in part as a stimulant issue, especially for black and young voters this fall. .

The frenzied last-minute lobbying continued on Tuesday, even while Biden remained on his summer vacation. Senate Majority Leader Chuck Schumer, DN.Y., one of the loudest advocates in recent years for student loan debt forgiveness, spoke privately on the phone with Biden and pleaded with the president to forgive as much debt as the government does. can, according to a Democrat with knowledge of the call.

In his pitch, Schumer argued to Biden that this was the morally and economically right choice, said the Democrat, who asked for anonymity to describe a private conversation.

Within the administration, officials have been discussing canceling more than $10,000 in student debt for certain categories of borrowers, such as Pell Grant recipients, since at least the early summer, according to three people with knowledge of the deliberations. That remained one of the last variables Biden considered in Wednesday’s announcement.

Democrats are betting Biden, who has seen his public approval rating plummet over the past year, could help motivate younger voters to the polls in November with the announcement.

While Biden’s plan is more limited than what he initially proposed during the campaign, “he will get a lot of credit for pushing through something he’s committed to,” said Celinda Lake, a Democratic pollster who worked with Biden during the election. 2020 .

She described student debt as a “gateway” for younger voters, meaning it influences their views and decisions about housing affordability and career choices. A survey of 18- to 29-year-olds conducted by the Harvard Institute of Politics in March found that 59% of those surveyed were in favor of some form of debt cancellation — whether it was for all borrowers or those who want it. need the most – although student loans were not ranked. high among the issues that most worried people in that age group.

Some proponents are already bracing for disappointment.

“If the rumors are true, we have a problem,” Derrick Johnson, the president of the NAACP, who has aggressively lobbied Biden to take decisive action, said Tuesday. He stressed that black students have higher debut charges than white students.

“President Biden’s decision on student debt cannot become the last example of a policy that leaves black people — especially black women — behind,” he said. “This is not how you treat black voters who came in record numbers and gave 90% of their votes to save democracy again in 2020.”

John Della Volpe, who worked as an adviser on Biden’s campaign and is the poll director for the Harvard Kennedy School Institute of Politics, said the details of Biden’s announcement were less important than the decision itself.

“It’s about trust in politics, in government, in our system. It’s also about trust in the individual, in this case President Biden,” said Della Volpe.

Coupled with fears of expanding abortion restrictions and Trump’s return to the political scene, Della Volpe said canceling student debt “gives an extra boost to an already improved position among young people.”

Republicans, meanwhile, see only political advantage if Biden pursues a large-scale student debt cancellation before the November midterm elections, anticipating backlash for Democrats — especially in states where large numbers of working-class voters are without college degrees. Critics of broad student debt forgiveness also believe it will open up the White House to lawsuits, as Congress has never given the president the explicit authority to forgive debts on its own.

The Republican National Committee on Tuesday dismissed Biden’s expected announcement as a “handout to the wealthy,” claiming it would unduly burden lower-income taxpayers and those who have already paid off their student loans to cover the costs. of higher education for the wealthy.

“My neighbor, a detective, had 3 jobs (including selling carpet) and his wife were working to ensure their daughter received a college degree with no student debt,” Rep. Kevin Brady, R-Texas, the top Republican on the House Ways and Means Committee, tweeted Tuesday. “Great sacrifice. Should their taxes now pay off someone else’s student debt?”

Biden’s lengthy deliberations have sent federal loan managers, who have been ordered to withhold statements of account while Biden weighed a decision, grumbling.

Industry groups had complained that the delayed decision gave them just days to notify borrowers, retrain customer service representatives and update websites and digital payment systems, said Scott Buchanan, executive director of the Student Loan Servicing Alliance.

It increases the risk that some borrowers will be accidentally told to pay, he said.

“At this late stage, I think that’s the risk we’re running,” he said. “You can’t just turn a dime with 35 million borrowers who all have different loan types and statuses.”

____

AP Education writer Collin Binkley in Washington contributed to this report.

Copyright © 2022 by The Associated Press. All rights reserved.


The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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