Biden’s Student Debt Payment Pause Boosts Loan Cancellation Request


WASHINGTON – Debt Collective, an offshoot of the Occupy Wall Street movement, was planning to rally outside the White House to demand that President Joe Biden keep a campaign pledge: to write off some student loan debt.

But after Biden extended the hiatus on federal student loan payments until May 1 last week, activists won a temporary victory – and a reprieve. As the omicron variant continued to cause an increase in coronavirus cases on Wednesday, Debt Collective called off its DC protest scheduled for mid-January. Biden, the group said in a Facebook post, had “bowed to our pressure.”

“The momentum is on our side,” said Thomas Gokey, co-founder of Debt Collective. “Large-scale debt cancellation is the appropriate next step, but it will take the same kind of public pressure to win. “

While consumer groups and activists have applauded the extended payment break, they remain focused on pushing for more. Biden has repeatedly said that canceling at least $ 10,000 in education debt would be part of his post-election economic stimulus package, but he did not include any such policies in the sweeping plan. bailout or this year’s domestic spending bill, signaling to liberal groups that the problem was not a priority.

Debt Collective announced on Wednesday that it will replace its rally with a virtual strategy session on how to hold the president accountable. Cody Hounanian, executive director of the Student Debt Crisis Center advocacy group, said extending the payment break would give borrowers more time to fight for the cancellation.

“With the extension last week, we believe the administration is starting to better understand the challenges facing student loan borrowers,” Hounanian said. Large-scale cancellation “must happen before millions of Americans are pushed into a system that is clearly broken.”

READ MORE: How Biden Can Save His Agenda Without Manchin Will be bunch

Activists and some Democratic lawmakers have urged Biden to issue an executive order canceling federal student debt, with some calling for $ 50,000 per borrower and others pushing for a full remission. Proponents say reducing the student loan burden would help stimulate the economy and close the racial wealth gap, as black borrowers carry disproportionate debt.

In a recent survey of nearly 1,300 black borrowers, conducted by Education Trust, two-thirds of those polled said they regretted taking loans that now appear “unpayable”. Many felt that the federal lending system exacerbated existing inequalities and said the best remedy would be widespread loan forgiveness.

“We spoke to black borrowers in the midst of the pandemic who were able to save for the first time, think about planning a family… because they weren’t making payments,” said Jalil Mustaffa Bishop, professor of education at Villanova University who co-authored the report. “They were clear that the annulment is necessary to end what many call a life sentence for debt.”

The Biden administration, however, has hesitated this year between assuring it revises the president’s legal authority to forgive student loans and insisting that Congress introduce a bill to carry out the policy.

The congressional path would be difficult, as Republicans and moderate Democrats such as Sen. Joe Manchin, DW.Va., oppose broad debt cancellation.

“We can’t really rebuild better without freeing millions from the economic burden of student debt, and luckily, with the stroke of a pen, President Biden has the legal authority to do so,” said Representative Ayanna Pressley, D-Mass., Said in early December at an event hosted by the nonprofit Student Borrower Protection Center.

Pressley, Senator Elizabeth Warren, D-Mass., And Senate Majority Leader Chuck Schumer, DN.Y., urged Biden to use the same legal authority to cancel the debt that Donald Trump’s administration had used to temporarily waive interest on federal student loans. in the coronavirus pandemic.

Earlier this year, Biden asked the Education and Justice Departments to produce notes on his administrative authority to cancel loans. In the fall, the New Yorker reported the existence of a heavily drafted Education Department memo Gokey obtained through an Freedom of Information request – confirming the administration had such a memo. since April.

People who spoke on condition of anonymity because they were not authorized to speak publicly said the Justice Department also produced a memo. Neither the justice system nor the Department of Education has commented on the documents, and the White House has not confirmed their existence.

There is no path to blanket student debt cancellation that is free from challenges, both legal and political. Members of the administration are torn over the merits of the debt cancellation, with some saying there are more pressing issues to be addressed, according to staff members who spoke on condition of anonymity because they did not were not allowed to speak in public.

The president himself has shown a lack of enthusiasm for politics. At a CNN town hall in February, Biden questioned whether it made sense to write off “billions of dollars in debt for people who went to Harvard and Yale … rather than using that money. to provide early education to young children from disadvantaged backgrounds. ? “

“I have a feeling Biden doesn’t want to do it anyway, so it doesn’t matter whether it’s legal or not,” said Beth Akers, senior researcher at the conservative American Enterprise Institute and former economic adviser to President George. W.. Bush. “If you go back to the campaign, he was not the first to put in place a loan cancellation proposal, and his proposal was the most modest of the candidates. He needed to compete with the field.

Akers noted that Biden hasn’t put together a team that has been “enthusiastic” about the debt cancellation, which she says reflects her priorities. She said the lack of clarity on whether Biden would grant a blanket pardon could make it difficult to resume student loan payments as borrowers hope for a cancellation. Announcing the latest extension last week, Biden told borrowers to prepare for a return to the normal repayment process in May.

Still, Debt Collective’s Gokey said it would be political suicide for Democrats to resume repayment ahead of the midterm elections next year. Representative Alexandria Ocasio-Cortez, DN.Y., said this month her party is “delusional” to think it can retain power if it doesn’t act on student debt.

Asked about Ocasio-Cortez’s comments during a “Face the Nation” appearance, Vice President Harris said the Biden administration had not abandoned debt cancellation.

“We need to… figure out how we can creatively relieve the pressure students are feeling because of their student loan debt,” Harris said.


About Author

Comments are closed.