Lauren Moye, FISM News
Rumors that President Joe Biden would deliver a scaled-down version of the loan forgiveness promises he made on the presidential campaign trail swirled over the weekend, but nothing has come to fruition as of yet. Most conservatives remain strongly opposed to any loan forgiveness, while progressives have called the prospective plan “a slap in the face” for not being enough.
The Washington Post announced on Friday that, according to three anonymous sources, Biden had settled on a plan to cancel $10,000 student debt per borrower. The debt forgiveness would apply to individuals who made under $150,000 per year or couples who reported less than $300,000 if filing jointly. The report stated Biden intended to announce this at last weekend’s University of Delaware commencement, but the plan reportedly changed after the mass school shooting occurred in Uvalde, Texas.
The White House, however, denied the accuracy of this report. Spokesman Vedant Patel told Reuters, “No decisions have been made yet. But as a reminder, no one has been required to pay a single dime of student loans since the president took office.”
Student loan payments have been deferred since March 2020 as a measure to provide financial relief during COVID-19. The deferment is currently set to expire at the end of August, but has been pushed back multiple times before.
In March, the nonpartisan think tank Committee for a Responsible Federal Budget estimated that the loan deferment had cost the government $100 billion in revenue. Meanwhile, economists at the New York Federal Reserve say that Biden’s purported debt forgiveness plan would add up to $321 billion of federal student loan debt. It would completely eradicate debt for roughly 31% of borrowers.
However, Biden has faced increasing pressure from progressives within his party to forgive up to $50,000 per student loan borrower, calling the $10,000 limit “too low.” Members of the Congressional Black Caucus (CBC) argue that doing so would help close the racial wealth gap in the U.S.
Representative Joyce Beatty (D-Ohio), who chairs the CBC, stated on May 20, “Canceling student loan debt is one of the most impactful ways to address ongoing economic and racial inequities plaguing our nations. … In order to reduce the racial wealth gap and advance a just and equitable economic recovery for all, we must alleviate the burden of student debt.”
According to Senator Elizabeth Warren’s office, a $10,000 debt forgiveness would only drop the overall percentage of Black individuals with student loans from 24% to 17%. A $50,000 forgiveness would decrease this number to 6%. Warren advocates for full forgiveness of all loans and tuition-free higher education.
Upon hearing of the rumored $10,000 proposal Warren reiterated her stance that she believes post-secondary schools should be free,
A ticket to the middle class shouldn’t come with a mountain of debt.
President Biden should use his executive authority to #CancelStudentDebt, and we must make technical schools, community colleges, and public universities tuition-free.
— Elizabeth Warren (@ewarren) May 27, 2022
NAACP President Derrick Johnson also responded to the rumored plan, calling it a “slap in the face” for black borrowers.
“The average Black borrower has $53,000 in student loan debt four years after graduation, nearly twice the amount as their white counterparts,” Johnson said, in a statement calling for a greater amount of relief.
He added, “President Biden, it’s not about whether you can do it; it’s about whether you have the will to do it.”