Biden Refuses to Expand Student Loan Forgiveness
CNN reported that President Biden reiterated his intention to forgive $10,000 of federal student loan debt as part of pandemic relief, despite calls from many Democratic members of Congress to increase the forgiveness to $50,000.
See: What It Would Really Mean to Cancel Student Loan Debt
Find: 9 Ways Student Debt Is Affecting Every Aspect of Americans’ Lives
The issue is big. SavingForCollege.com reports that 45.1 million borrowers held $1.6 trillion in student loans in 2019, with an average balance of about $35,000. People who have large loan balances relative to income are not buying cars, furniture or houses, putting a drag on the economy.
President Biden has the authority to cancel $50,000 of student loan debt. @SenSchumer and I are urging him to act. Here's our statement. #CancelStudentDebt pic.twitter.com/MQYxQJMioM
— Elizabeth Warren (@SenWarren) February 17, 2021
Biden seems to have two concerns. The first is ensuring that the forgiveness goes to people who actually need it. There is a difference between someone who borrowed money to pay for a degree in education and now teaches in a low-income school district and someone who used student loans to get an MBA at Harvard and goes to work for a hedge fund.
See: What Biden’s Executive Order on Student Loan Deferments Means for You
Find: How to Get the Student Loan Interest Deduction
Also, no one wants to encourage colleges to raise tuition prices under the assumption that forgivable loans will be available to cover the increase.
Biden’s second concern about increasing student loan forgiveness is that he seems to believe that this should really be a legislative decision, which is not a surprise given that most of his political experience is legislative. That would allow for a hashing out of some of these issues and lead to more permanent policies.
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