Did Joe Biden backtrack on poll promise? Prez unlikely to give student debt relief but experts not surprised
During his run for the White House, President Joe Biden backed the idea of giving students (undergraduate or graduate) debt relief. The veteran Democratic leader proposed setting up a program that offered $10k of debt relief for every year of national or community service up to five years and a total of $50k. His encouraged party colleagues both in the House and Senate have repeatedly urged him since then to forgive up to $50k of federal debt through executive order during his first 100 days in office. Those 100 days are now over but Biden hasn't done anything about it.
In fact, it is now reported that Biden is likely to take a U-turn on the matter. Last Friday, May 21, The Washington Post reported that several “ambitious Biden campaign pledges” are likely to be excluded from the annual White House budget and they include the student debt relief. Forbes reported on Monday, May 24, that the Biden administration is set to review and overhaul regulations that govern major federal student relief programs, including the student loan forgiveness programs.
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The president, who returned to the White House on Sunday, May 23, from a weekend outing to Camp David, is set to announce his latest budget at the end of next week and has reportedly grown suspicious of loan relief. Biden had been under pressure from progressive Democrats like Elizabeth Warren and Alexandria Ocasio-Cortez to forgive the student debt. Senate Majority Leader Chuck Schumer was also in favor of the same.
1. Biden-Harris can cancel billions of dollars in student loan debt, giving tens of millions of Americans an immediate financial boost and helping to close the racial wealth gap. This is the single most effective executive action available for a massive economic stimulus.— Elizabeth Warren (@SenWarren) November 12, 2020
Why should the public pay, Biden asks
The New York Times reported last week that Biden said he now suspects the idea of canceling debt. “The idea that you go to Penn and you're paying a total of 70,000 bucks a year and the public should pay for that? I don't agree,” he told the outlet. Previously, the White House said Biden wanted to see student debt getting wiped out through a Congress legislation and not executive order.
In April, Biden’s Chief of Staff Ron Klain said the former was mulling scrapping up to $50k in debt. He told Politico Playbook that Biden even asked Education Secretary Miguel Cardona to confirm whether he is legally equipped to wipe out the loan debt. In March, White House Press Secretary Jen Psaki said they were still ‘exploring options’ concerning student loan policy. “The President continues to call on Congress to cancel $10,000 in debt for student loan borrowers,” Psaki said, adding: “That’s something Congress could take an action on, and he'd be happy to sign.”
Americans have over $1.7 trillion in student debt and according to the federal reserve, more than 30 percent of all the country’s adults have student loans, even when the country is fighting a pandemic-fueled recession and high unemployment.
Experts not surprised by Biden U-turn
However, while the president’s U-turn could see the progressive wing of his party fuming (Ocasio-Cortez already expressed her disappointment in February), experts are not too surprised. Higher education expert Mark Kantrowitz told CNBC that the news is “not surprising”. According to him, those who expressed interest in what lies ahead for student debt relief should rather focus on the memo that Biden has sought about the use of executive order to scrap student loans. “President Biden is still waiting for the U.S. Department of Justice and the U.S. Department of Education to report on their review of his legal authority to forgive student loan debt through executive order,” Kantrowitz said, adding: “Only after he receives that report, which I expect will find that he does not have the legal authority, will the ball be in Congress’ court.”
Forbes contributor Zack Friedman said from the fact that student debt relief has not featured in Biden’s proposed stimulus and infrastructure packages, one could well deduce that he was unlikely to cancel student loans. According to him, if Biden really wanted to do it, he would have done it by now.
Both Biden and his predecessor Donald Trump used executive power to pause federal student loan payments in view of the economic downturn caused by the Covid-19 pandemic. The policy is set to expire on October 1 this year.