Biden tells the Hispanic faction in Congress that he is looking to waive most of the federal student loan debt 2022-04-26 13:10:59


President Biden is looking at various options to waive most, if not all, of his federal student loan debt — a move that would excite some of his most loyal supporters and cash-strapped students across the country, but that is a departure from campaign pledges to offer limited relief. .

The president shared his plans during a 90-minute White House meeting Monday with members of the Hispanic Congressional bloc, exchange participants told CBS News. The move could affect more than 43 million borrowers who own more than $1.6 trillion in federal student loan debt, the second-largest debt owned by Americans after mortgages.

Earlier this month, the White House said it is extending the era of the pandemic Pause on Federal Student Loan Payments As of August 31, a move that has helped nearly 41 million borrowers save $5 billion in interest payments per month, according to the Department of Education.

At the White House press briefing on Monday, Press Secretary Jen Psaki confirmed that the administration will make a decision about whether to cancel some student loan debt between now and the end of August or the downtime will be extended further. The president has said in the past that he supports canceling up to $10,000 of student loan debt. Psaki said she doesn’t have anything to preview about the issue or how canceling student loan debt will work.

Soon after Psaki’s briefing and down the hall in the West Wing, the topic of student loans surfaced at the President’s Residence. Meet with Latino legislatorsan exchange that also included a detailed conversation on immigration policy, environmental justice and the upcoming midterm electionsAccording to the deputies attended.

When members of the Latino Caucus mentioned student loans, the president said he’s asked his aides to explore his options — a signal to lawmakers that he might be willing to go further than he pledged during the campaign.

“They are looking at different options on what they can do. At full tolerance. That was our request,” said one of the lawmakers present, who asked not to be named to speak frankly about the meeting.

It wasn’t immediately clear when the president would act, but the August 31 deadline, set just as early voting would begin in several states before the midterms, is seen by many Democrats as a natural point for making such an announcement.

“In terms of the president coming out and talking about student loan cancellation with different groups, I think that’s a very good sign,” said Cody Hunanian, executive director of the Student Debt Crisis Center. “I think the president is starting to realize that student debt cancellation is very popular. It’s so common with specific groups of voters that the president needs to win this upcoming election, and the fact that he’s using debt cancellation as a tool that he can talk to these communities with, to me that’s a change Little “.

Hunanian notes that the White House has said it has been considering canceling student debt for some time. He said the persistent public message that management is looking into the matter as it continues to extend the repayment standstill has been overwhelming to borrowers.

Officials in the Biden administration have been examining whether the president has the authority through executive actions to cancel federal student loan debt since the president took office more than a year ago.

“What this argument boils down to is, is Biden — or any president, by law, for that matter — violating federal law by forgiving his student loans from the board other than what he was doing under existing programs?” Betsy Mayotte, of the Institute of Student Loan Counselors, said. “There are some people who say he has that authority under the law to do that, and there are some people who say he doesn’t have that authority other than for a small portion of the Perkins loans.”

The Perkins Program, which gave out low-interest loans to low-income students, stopped making new loans in 2017.

Cancellation of student loan debt will also depend on whether a group or individual challenges the procedure. Such a move could lead to a messy legal battle leaving borrowers in limbo for some time. That’s why the White House, some experts and student loan officials have suggested that lawmakers should be the ones to take action, because the legislation won’t face the same legal challenges. But a deeply divided Congress is unlikely to be able to pass a bill on the issue.

“Ultimately, it will be nullified by this approach,” student loan expert Mark Kantrowitz said on canceling student loan debt through enforcement action. He argued that the best path to debt relief would be through the regulatory process, which he said is a slower process, but which “is more likely to survive legal challenges.”

During his presidential campaign, Mr. Biden said he supports canceling $10,000 of student loan debt and congressional action. But Some of the top Democrats They demanded that he go further and use Executive Action to cancel $50,000 of student loan debt for each borrower.

“President Obama did it, President Trump did it, President Biden did it over and over again. The power is clearly there,” Senator Elizabeth Warren, a Democrat from Massachusetts, said Sunday on CBS’ “Face the Nation.”

at new analysis, the Federal Reserve Bank of New York estimated that canceling $50,000 of student loan debt would forgo the full balance of nearly 30 million federal student loan borrowers. The average tolerance would be more than $23,800 per borrower. The move would cost about $904 billion. But some of that money, advocates point out, has been out the door already for decades.

Advocates of student loan debt cancellation have also argued that it is a way to build racial equality. Studies show that black borrowers often have to take out larger amounts of student debt for higher education. After graduation, studies have found that the average student debt held by black borrowers is higher than the burden borne by white and brown borrowers.

Race, as well as economic assistance to debt-burdened working-class Americans that they may not have fully understood when they sought loans, are the main reasons why members of the Latino community continue to push for loan forgiveness.