Biden gives cautious opening to student loan forgiveness

Incoming US president stresses need for action but avoids key details

十一月 19, 2020
Times Square tribute to president-elect Joe Biden
Source: iStock

President-elect Joe Biden is raising expectations of a broad move to forgive US student loan debt, elevating a policy option on college affordability that carries a complicated mix of potential political support.

Mr Biden, in an exchange with reporters, said he backs the idea of including $10,000 (£8,000) in student loan debt forgiveness as part of a multibillion-dollar bailout for people and industries harmed by the coronavirus pandemic.

“It does figure in my plan,” Mr Biden told reporters asking about the Democrat initiative to include $10,000 per person in student loan debt relief in the aid bill that’s been struggling for months to win passage in Congress.

Unconditional loan forgiveness would take Mr Biden beyond his presidential campaign platform, which proposed seeking $10,000 per person in annual student debt relief for five years in exchange for some type of community service.

While Mr Biden spoke with reporters in the context of overall coronavirus relief, he has been facing pressure from some Democratic allies to simply declare as president that large amounts of federal student loan money will be forgiven.

Those pushing that idea include the US Senate’s Democratic party leader, Chuck Schumer, and a group of leading progressives in the House of Representatives.

Mr Biden, though, has not publicly joined them, and experts are unclear on exactly what loan forgiveness authority a president might have without the explicit approval of Congress.

The White House is generally seen as having some range of unilateral power, given that President Donald Trump issued an order in March sparing student loan borrowers from making any payments until the end of the year.

“It’s clearly possible to do something,” said Frederick Hess, the director of education policy studies at the American Enterprise Institute, a conservative policy thinktank. “The boundaries of what that something is are entirely unclear.”

Concerns over expanding US presidential power in all policymaking arenas have grown in recent years, given that partisan tactics such as gerrymandering have produced an increasingly factionalised and moribund legislative branch.

Mr Biden is expected to test that power for a number of his policy priorities. They include college affordability, where his chief campaign promise – covering tuition fees for all students at two-year public colleges and most students at their four-year counterparts – faces difficult prospects in the expected Republican-controlled Senate.

Given that reality, some leading congressional Democrats see unilateral loan forgiveness as a leading non-legislative option to help whittle down the $1.5 trillion on student loan debt owed nationwide.

For others along the political spectrum, it’s more complicated. Many are excited by projections that large-scale student debt forgiveness could give the teetering US economy a huge boost, but are troubled by the idea of giving away federal money.

Americans with student debt are hardly alone in struggling during the pandemic, said Sandy Baum, a former professor of economics at Skidmore College and expert on higher education finance at the Urban Institute, a left-leaning thinktank.

Broad student loan forgiveness “is essentially a transfer to a group of people that excludes everyone who didn’t go to college – the group struggling most”, Dr Baum said.

Yet for those labouring under the $1.5 trillion debt load, solutions are not obvious. Dr Hess firmly opposes unconditional loan forgiveness and sees a potential “bipartisan sweet spot” in Congress tying loan repayment levels to income. He then quickly acknowledged that conservatives might not welcome the idea of taxpayers covering loan costs for students who choose majors known to be associated with low-paying careers.

paul.basken@timeshighereducation.com

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Reader's comments (5)

Before I read this article: - All Student Loans should be backed by the Federal Government! - I feel / believe that all Student Loans should be totally interest free! No 'Ifs', no 'Butts'! - All Student Loans should be paid back, by Pre-Tax Payroll Deductions. - All Student Loan Payback payments should begin, and take place.... ONLY from an individual persons pay check, where their take home pay for the period of time covered by that check is equal to or greater than a minimum of $52,000.00/year or $143.00/day! - At any point in time, until the totality of the Student Loan is repaid, every single day which the persons daily income is below $143.00/day, the NO payment is to be Due, nor is to be taken! Student Loan Lending should NEVER have been, nor ever should be, in any way, a "For Profit" endeavor! Now, it's time to read the article and discover if, and how my views will be changed.
"Mr Biden, in an exchange with reporters, said he backs the idea of including $10,000 (£8,000) in student loan debt forgiveness as part of a multibillion-dollar bailout for people and industries harmed by the coronavirus pandemic." - I am against this for what should be obvious, basic, reasons: How would this be implemented? How would the decision(s) as to who gets this, be made? This would require Hundreds of $MILLIONS, upon Hundreds of $MILLIONS, of PUBLIC dollars, in Administrative WASTE!
" “It does figure in my plan,” Mr Biden told reporters asking about the Democrat initiative to include $10,000 per person in student loan debt relief in the aid bill that’s been struggling for months to win passage in Congress...." - I am against this! Again this would result in Hundreds of Millions of Public dollars being WAISTED via Administrative incompetency! WHY, possibly, should this.... So called, 'Student Loan Forgiveness', in any way what so ever, be any part of Covid financial assistance? It should NOT be! These are two totally separate, completely un-related issues. Yes, Student Loans do need to be Interest Free, and repaid in a proper Financially responsible way. Separately, and Un-relatedly..... Yes, there MUST be, NOW, NOW, NOW be CASH financial assistance, completely free of all requirements, given by our Federal Government, to ALL American Citizens, and Permanent Residents. But these two Financial issues ARE apart, and should remain totally apart from each other!
"Unconditional loan forgiveness would take Mr Biden beyond his presidential campaign platform, which proposed seeking $10,000 per person in annual student debt relief for five years in exchange for some type of community service." I am against this! Strings? Huh? What? NO!!!! The attachment of 'Strings', to Student Loan Forgiveness, serves to achieve ONLY 3 things: - MASSIVELY increased Administrative Incompetence caused Public dollars, by the MILLIONS, being WASTED! - EXTREMELY reduced levels of people participating in such a Program..... Further resulting, in even greater Administrative WASTE of Public Dollars! - EXTREME Criminal, Administrative STEALING of Hundreds of MILLIONS of Public Dollars, (Called: "Misappropriation of funds")! All with virtually NO positive result!
"While Mr Biden spoke with reporters in the context of overall corona virus relief, he has been facing pressure from some Democratic allies to simply declare as president that large amounts of federal student loan money will be forgiven. Those pushing that idea include the US Senate’s Democratic party leader, Chuck Schumer, and a group of leading progressives in the House of Representatives." - I do not precisely disagree with this. YES, as the Student Loan system currently is, its' be a 'For Profit' Industry..... There MUST be Student Loan Forgiveness, of some effectively positive sort! It is the method and the implementation of such for which, I reserve my likely disagreement!

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