As President Biden continues to consider a broad student loan forgiveness initiative, a huge coalition of advocacy organizations is urging him to cancel substantial amounts of student loan debt.
Biden administration officials have been suggesting for over a month that executive action to cancel student debt is under serious consideration. Top staffers, and Biden himself, have said that a decision could be imminent, although there has been no announcement so far. There was speculation that the administraiton could make an announcement on student loan cancellation last weekend, but that did not happen.
Here’s the latest.
Biden Has Expressed Support for $10,000 in Student Loan Forgiveness
During his 2020 presidential campaign, Biden repeatedly said he would support $10,000 in broad student loan forgiveness.
“We should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues,” said President Biden in a tweet in March 2020. “Young people and other student debt holders bore the brunt of the last crisis. It shouldn’t happen again.”
After taking office, Biden and White House officials affirmed that stance, and indicated that he would gladly sign a student loan forgiveness bill cancelling $10,000 in student loan debt. Forgiving $10,000 in federal student loans would wipe out the student loan balances for up to 16 million borrowers and make a third of all student loan borrowers debt-free, according to the Center for American Progress.
Biden had expressed reluctance about using executive action to cancel student loan debt without a specific bill passed by Congress. But he and other top White House officials seem to have warmed to the idea of relying on executive authority in recent weeks.
Advocacy Groups Say $10,000 in Student Loan Forgiveness Is Not Sufficiently Impactful
Last week, a broad coalition of over 500 organizations wrote to President Biden, urging him to cancel more than $10,000 in student loan debt for borrowers. The coalition includes labor unions and civil rights organizations.
“There is growing energy and strong bipartisan public support for immediate broad-based debt cancellation,” wrote the coalition. “Such executive action is one of the few available tools that could immediately provide a boost to upwards of 44 million borrowers and the economy.”
The coalition called on Biden to cancel upwards of $50,000 in student loan debt for borrowers, noting that such widespread loan forgiveness would “help narrow the racial and gender wealth gaps.” Cancelling $50,000 in student loans for every borrower would make nearly eight in ten student loan borrowers completely debt-free, according to the Center for American Progress.
“The average Black borrower has $53,000 in student loan debt four years after graduation, nearly twice the amount as their white counterparts. President Biden, $10,000 will not help those in the lower class who have been devastated by our oppressive system,” said NAACP President Derrick Johnson in a statement. “The Black community will be watching closely when you make your announcement, but $10,000 is not enough. $10,000 in cancellation would be a slap in the face. President Biden, it’s not about whether you can do it, it’s about whether or not you have the will to do it.”
Will Biden Impose Income Caps On Student Loan Forgiveness?
Biden administration officials have emphasized that no decision has been made on broad student loan forgivness. But the White House also appears to be honing in on imposing income restrictions on any loan forgiveness initiative, if one is announced. The Washington Post reported last week that any student loan cancellation would be limited to single borrowers who earned less than $150,000 last year, or jointly-filing married borrowers who earned less than $300,000.
Advocacy groups for borrowers have been urging Biden to make any student loan forgiveness universal and automatic, both to broaden the impact and to reduce any bureaucratic red tape. Because the Department of Education does not have automatic access to borrowers’ tax or earnings records, any income restriction would likely require borrowers to submit a formal application for loan forgiveness.