Will Biden cancel student loan debt? As college costs spiral, here’s what he’s considering – USA TODAY

0
12

WASHINGTON – The Biden administration entered the White House with an eye toward relieving the strain of student loan debt, particularly amid the added financial burden of the coronavirus pandemic.

On Day One in office, President Joe Biden signed an executive order extending a pause student federal loan payments enacted by the previous administration as part of COVID-19 relief. Liberal activists and lawmakers urged the president to go further and cancel student loan debt, but he has said firmly that he does not believe he has the authority to do so by executive order.

That changed Thursday, when White House chief of staff Ron Klain said Biden asked his education secretary to explore the president’s authority to cancel student loan debt, a sign he is open to moving left on the issue.

President Biden advocates for student loan forgiveness, here’s where he stands

USA TODAY

What’s next on infrastructure plan: How does Biden plan to get it through Congress?

Critics of student loan debt forgiveness, including conservatives and some liberals, argue that it would unfairly benefit higher-income earners with college educations and that individuals who took out loans have a responsibility to pay them back, regardless of circumstance.

Biden’s push for student loan changes

Though Biden has been hesitant to bypass Congress on canceling student loan debt, he has said since the days of his campaign that the government needs to help those with “debilitating” student debt.

“I understand the impact of debt,” he said at a CNN town hall in February.

Biden said student loans should have 0% interest – a move he enacted alongside the repayment freeze through September. He expanded student loan forgiveness for public-sector workers and canceled debt for students defrauded by for-profit schools.

He’s hesitant to cancel loan debt for those who went to top-tier schools. The federal government should not forgive debt for students who went to elite schools such as “Harvard and Yale and Penn,” Biden said.

Trump and Biden froze federal student loans: Should borrowers pay or pause before they thaw?

Thursday, Klain said Biden asked Education Secretary Miguel Cardona to craft a memo on the president’s executive authority to cancel student loan debt.

“He’ll look at that legal authority, he’ll look at the policy issues around that and he’ll make a decision,” Klain said in an interview with Politico Playbook.

Enacting student loan forgiveness through Congress might be difficult in an evenly split Senate.

College costs are on a steep rise

College costs have steadily risen in recent decades, making the price tag of a higher education all but unaffordable without the assistance of student loans for many.

Students have been told that prosperous lives depend on a higher education. First-year students responding to a UCLA nationwide survey placed a higher importance on making more money and obtaining a better job as reasons for going to college in 2019 than students in the past 45 years. But the high cost of college has increased the debt that graduates have to climb out of as they start their careers.

Higher education poses an imposing financial challenge.

Higher education poses an imposing financial challenge.
Sean Rayford/Getty Images

U.S. News and World Report’s analysis of its ranked national universities shows that in the past 20 years, average tuition at private colleges rose by 144%; at public universities for out-of-state students by 165%; and at public universities for in-state students by 212%.

Data collected by the College Board shows that, after adjusting for inflation, over the past two decades, average tuition and fees at public four-year institutions have increased by more than $5,000 and at private colleges and universities by more than $13,000 annually.

This school year, the College Board found that the average first-time, full-time student at a public, four-year college has to pay $14,850 in tuition, fees and boarding after grant aid. The average student at a private institution must cover $29,110 after grant aid. This does not include additional costs such as books, supplies and transportation.

Americans hold about $1.7 trillion in student loan debt, according to Federal Reserve data. The average 2019 graduate of private or public colleges holds an average of $28,950 in debt, according to the Institute for College Access and Success.

“The more college costs soar, the more degrees become a measure [of] privilege than competence. Our country would be better off if we made public colleges tuition-free & cancelled student loan debt,” Rep. Alexandria Ocasio-Cortez, D-N.Y., tweeted.

President Biden pitches $2 trillion infrastructure and jobs plan

The White House is comparing President Joe Biden’s infrastructure proposal to the construction of interstate highways and the Space Race.

staff video, USA TODAY

Liberals want Biden to forgive $50,000 in student loan debt

Citing mounting debt for generations of college graduates, Democrats asked Biden to commit to $50,000 in federal student loan forgiveness per borrower, putting pressure on him to bypass Congress through the use of executive action.

Student loan debt reached an all-time high in 2020 of more than $1.7 trillion. The average graduate reached a record in loan debt of more than $30,000 in 2019 for the first time since U.S. News and World Report tracked data, which is more than $6,000 higher in debt on average than a graduate held 10 years prior.

Previous presidents, including Barack Obama and Donald Trump, provided student debt relief.

Biden said student debt forgiveness would need to be justified against other policy priorities.

“Is that is going to be forgiven, rather than use that money to provide money for early education for young children who come from disadvantaged circumstances?” Biden asked at the CNN town hall.

Students graduate at City College on June 3, 2016, in New York City. The debt many grads face right out of college has continued to climb.

Students graduate at City College on June 3, 2016, in New York City. The debt many grads face right out of college has continued to climb.
Spencer Platt/Getty Images

Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., have said they believe the president has the authority to cancel $50,000 in loans, and they urged him to do so immediately.

“Studies show that student debt cancellation can substantially increase Black and Latinx household wealth and help close the racial wealth gap, provide immediate relief to millions who are struggling during this pandemic and recession, and give a boost to our struggling economy through a consumer-driven economic stimulus that can result in greater home-buying rates and housing stability, higher college completion rates, and greater small business formation,” the pair said in a statement last fall.

Visual: Joe Biden wants to spend $2 trillion on infrastructure and jobs. These 4 charts show where the money would go.

“Even before the coronavirus pandemic plunged our economy into chaos, student loan borrowers were already in crisis,” Warren said.

Ocasio-Cortez pushed back against Biden’s point that student debt forgiveness might come at the cost of other education programs. “Nowhere does it say we must trade off early childhood education for student loan forgiveness. We can have both,” she said.

“Many won’t fully feel $10k in forgiveness until after a Biden presidency is over, when they’ve spent 10 years paying off the other $20k+,” Ocasio-Cortez tweeted. “Dems should be championing policy that people can feel ASAP. We need to go big.”

Published
9:34 am UTC Apr. 4, 2021

Updated
5:46 pm UTC Apr. 5, 2021

LEAVE A REPLY

Please enter your comment!
Please enter your name here