As Biden drags on student loan forgiveness, Dems grow increasingly frustrated

White House chief of staff Ron Klain and a deputy director of the National Economic Council, Bharat Ramamurti, are among aides urging Biden to announce some form of student loan forgiveness.

The White House’s hesitation on the issue represents the latest rift within the Democratic Party, which Biden has failed to unite around his ambitious economic agenda. But this time it’s the Democratic base that has yet to persuade the president to use his power for broad loan relief.

Proponents see the move as having few political downsides. Many progressive lawmakers have called on the White House to write off at least $50,000 of debt per borrower, possibly the entire loan portfolio held by the Department of Education, which totals more than $1.6 trillion. .

Ramamurti, a former aide to Sen. Elizabeth Warren, spoke particularly about a pardon program, according to people familiar with the internal deliberations. He views student debt forgiveness not only as politically popular, but also as a tool to reduce racial and class inequality in the United States.

Biden’s reservations relate to both the legality of canceling debt through executive action and whether a large discount would be good policy, the people said. He unequivocally supports Congress in passing legislation to cancel $10,000 of debt per borrower, a White House official said.

The people asked not to be identified discussing the internal deliberations.

“Looking at what you can do with executive authority and action, that always takes a long time,” White House press secretary Jen Psaki told reporters Thursday. a breakfast hosted by the Christian Science Monitor. “And there are important political questions here – good political questions.”

While some in the education community are skeptical of Biden’s pledge to forgive student loans, seeing him as having been pushed to support the idea by Warren and other liberal opponents during the 2020 Democratic primary, the government has been preparing the ground for the move since it took office.

Policy experts across the administration have spent months studying options for a remission program such as income requirements, whether to include graduate student loans or just undergraduate debt, and how it would apply to people who went into debt for school but never graduated.

More than a year ago, Biden ordered the justice and education departments to determine the extent of his power to forgive student debt. The Department of Education recently issued a “pre-disposition and deliberative” legal memorandum on the matter, but redacted its text entirely.

These six blank pages only fuel speculation about the administration’s plans ahead of the midterm elections in November.

A Department of Education spokesman said the administration wants a long-term change to make college more affordable and officials are still considering options for further executive action.

Inside the White House, plans are being drawn up by officials from the National Economic Council, the Council of Economic Advisers and the Domestic Policy Council. Susan Rice, the director of the DPC, is not among the officials pushing Biden for a radical move, two of the people said.

Biden has sought to aggressively expand higher education options for low- and middle-income people, proposing as part of his “Build Back Better” economic plan to make community colleges free and expand Pell grants, that help pay for college education for the lowest earners. Americans.

But he did not include loan forgiveness in the plan, preferring to have Congress craft a program itself.

With lawmakers deadlocked on almost every issue, Democrats in favor of canceling the loans have increasingly pressed Biden to relieve some of the debt through executive action.

White House officials said Biden plans to waive at least $10,000 in federal loans per borrower and signaled that people earning more than $125,000 a year likely wouldn’t qualify. Legal experts say an income limit would make an executive order more difficult to challenge in court.

Republicans have attacked loan forgiveness as a potential new driver of inflation and unfair to people who have paid off student debt. Senate Republican Leader Mitch McConnell has called the student loan forgiveness a “jubilee for the elites” and Republicans in the House and Senate have introduced token legislation that would prevent Biden from forgiving the loans through government action. ‘executive.

But the loan forgiveness has broad support among Democrats. Even Joe Manchin, the West Virginia senator who blocked Biden’s economic agenda in an equally divided Senate, said he supports at least some relief.

About 43 million Americans have outstanding federal student loans, and the average balance is over $37,000. The majority of debt is owed by households in the highest income brackets, according to the Education Data Initiative.

Black college graduates owe an average of $25,000 more in student loans than white graduates.

About 64% of registered voters support at least one student debt forgiveness, according to a Politico/Morning Consult poll last month. But only 5% said they saw education issues – like student loans – as the top issue for midterms.

Many legal experts, even those once skeptical of Biden’s authority, have concluded he could order at least loan forgiveness. But the extent of his power – and where he gets it from – remains up for debate.

A provision in the Higher Education Act gives the Secretary of Education the power to “compromise, waive or cancel departmental claims against student borrowers.”

A 2003 law also arguably gives Biden the power to order the Education Secretary to forgive federal student loan debt in emergencies, such as the COVID-19 pandemic, said Luke Herrine, a professor. law adjunct at the University of Alabama, and Jonathan Glater. , professor of law at the University of California at Berkeley.

But Mark Kantrowitz, a financial aid expert, said using either of those two laws to create a sweeping new pardon program — even in a targeted way — would be easily challenged in court. Biden could instead modify existing repayment plans by reducing the current remission period, now typically 20 or 25 years, and changing income caps, Kantrowitz said, likely avoiding a legal challenge.

It’s unclear who would have standing to sue a pardon program, though plaintiffs could include members of Congress or loan-service companies that hold federal contracts and risk financial loss.

Progressives say there is precedent for a pardon program as the Trump and Biden administrations suspended student loan repayments and interest accrual during the pandemic. Biden has yet to authorize payments to resume and has already forgiven $18.5 billion in student loans, including more than $5.8 billion for severely disabled borrowers.

“Clearly they have the power; they use it,” Warren said last week.


About Therese Williams

Check Also

Senate approves Lisa Cook as first black woman in Fed role

WASHINGTON (AP) — The Senate on Tuesday confirmed economist Lisa Cook to serve on the …