- President Joe Biden is considering a plan to forgive $10,000 in student loan debt, according to Bloomberg.
- Biden wanted to pass a debt relief bill through Congress, but is now considering an executive order.
- Progressives have long called for the administration to come up with a plan to tackle student loans.
President Joe Biden is considering forgiving a minimum of $10,000 in student loan debt per borrower through an enforcement action, according to people with knowledge of the matter who spoke to Bloomberg.
A sweeping debt relief effort by Biden would represent a sea change from the resolutely cautious approach he has taken on the issue since entering the White House last year. And it would also present an economic and ideological dilemma for the administration, as deficit hawks feel broad cancellation may worsen inflation problems, while many liberal allies may feel the president’s efforts aren’t going far enough.
According to Bloomberg, nothing concrete has yet been finalized, but any cancellation plans that emerge are likely to be geared toward lower-income and middle-class Americans, according to people with knowledge of the talks.
Biden recently laid out some of his conditions for any potential plan, reiterating his opposition to eliminating about $50,000 in student debt per borrower, a long-standing wish that many lawmakers, including Sens. Chuck Schumer of New York and Elizabeth Warren of Massachusetts, along with representatives. Alexandria Ocasio-Cortez of New York and Ayanna Pressley of Massachusetts—have called on the administration to comply.
“I’m considering dealing with some [student] debt reduction,” Biden said at the White House on Thursday. “I am not considering a $50,000 debt reduction, but I am in the process of taking a hard look at whether there will be additional debt forgiveness. I’ll have an answer for that in the next two weeks.”
The Washington Post recently reported that the administration was launching a plan to exclude high-income earners from any debt cancellation framework the administration might devise, with top advisers mulling limiting relief to individual borrowers who earned less than $ 125,000 or $150,000 last year, while setting a limit of $250,000 or $300,000 for joint filers.
If Biden eliminated $10,000 in student loan debt for each borrower, the total would come to about $245 billion, according to the nonprofit Committee for a Responsible Federal Budget.
The Biden administration earlier this month extended the federal pause on student loan payments for a fourth time, through August 31, giving borrowers four more months from the previous May 1 restart date.
However, progressive Democrats have pushed for more aggressive action on the issue for more than a year, arguing that the president has ample room to eliminate student debt. Many lawmakers are increasingly concerned that Biden’s inaction on student loan cancellations will lead to lower turnout this fall among younger voters, many of whom were drawn to the candidacy of independent Sen. Bernie Sanders of Vermont because of this same problem.
Sanders said Wednesday that Biden should eliminate “all student debt in the entire United States.”
Democratic Rep. Mondaire Jones of New York told Bloomberg that while he feels the president should cut more than the $10,000 baseline that is reportedly being considered, “even $10,000 would be transformative for millions of Americans.”
However, moderate Democrats have been less vocal about large-scale cancellation plans, with Democratic Sen. Joe Manchin of West Virginia telling reporters last week that he was unsure about “just writing it off completely,” while Republicans they overwhelmingly oppose the relief plans, saying the administration’s potential actions would benefit upper-class voters at the expense of lower-income people.
In recent months, Biden has seen his support among millennials and Gen X and Z drop sharply compared to his stronger position among the silent generation and baby boomers.