Biden is behind on his student debt cancellation plan, frustrating supporters

WASHINGTON — Joe Biden said during his presidential campaign that he would reduce student debt for millions of Americans, but his allies remain divided on the issue and some of his supporters are losing hope that he will keep his promises.

Melanie Kelley, 38, of Denver, has $125,000 in student loans. When the Biden administration’s pandemic-related pause on student loan payments ends in May, she will owe $1,000 a month.

“It became this unmanageable beast for me,” she said. “May is not that far away. How am I going to understand this? A management consultant, she said she worked as a DoorDash driver to supplement her income, but her debt prevented her from starting a family or buying a house.

“A lot of people won’t vote anymore because they feel like they’re not being heard,” said Ms. Kelley, who voted for Mr. Biden in 2020.

Ms Kelley is one of an estimated 43 million Americans in debt. As a candidate, Mr. Biden endorsed the cancellation of $10,000 of student debt per borrower through legislation and proposed to cancel federal tuition-related debt for people who earned undergraduate degrees. at public colleges and universities, as well as schools that historically served black and minority students.

Senate Majority Leader Chuck Schumer (D., NY) is among Democratic lawmakers who want President Biden to issue a legal memo detailing executive power to eliminate student debt.


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Drew Angerer/Getty Images

In total, Americans owe about $1.6 trillion in federal student loans and more than $130 billion in private student loans, according to data firm MeasureOne.

Legislative efforts to write off student debt have been unsuccessful in Congress, and progressive lawmakers are increasing pressure on Mr. Biden to take executive action, calling on him to write off up to $50,000 in debt per borrower.

“He has to,” said Sen. Elizabeth Warren (D., Mass.). “It’s the right thing for generational equality; it’s the right thing for racial equality; and it’s the right thing to strengthen our economic future.

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Many Republicans oppose debt cancellation. House Republican lawmakers argued in a letter last year that it would be “an affront to the millions of borrowers who have responsibly repaid their loan balances.”

Lew Gardner, 58, of Las Vegas, joined the military nearly 38 years ago partly because of the promise the government would help him pay off his student loans. But he also took out private loans that didn’t qualify, and his balance peaked at around $45,000 before he finished paying them off in 2005. He bristles at suggestions from elected officials that taxpayers’ money should be spent to cancel the debt.

“What feels good is ‘Let’s just wipe out the debt and then you vote for me again,'” said Mr Gardner, who backed Donald Trump in the 2020 election. taxpayers.”

A 2020 Trump supporter, Lew Gardner of Las Vegas, has paid off his student loans and says he doesn’t want taxpayers’ money spent on canceling such debt.


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Lew Gardner

Since taking office, Mr. Biden has extended a pandemic-related pause on student loan payments initiated under the Trump administration and overhauled student debt forgiveness programs for people with disabilities and working people. in the civil service, paying off the debt of about 675,000 borrowers, according to the Ministry of Education.

Mr. Biden has revealed little publicly whether he plans to take further steps to cancel student debt.

At a nearly two-hour press conference last month, the president avoided answering a question when asked about his campaign promises on the matter. White House officials said he continues to support legislation to eliminate $10,000 in student debt per borrower, despite his lack of a way forward in Congress. Officials said the administration was considering additional executive branch actions to provide debt relief, but declined to detail them or provide a timeline for their rollout.

The debate over whether Mr. Biden can erase billions in federal student debt with the stroke of a pen has divided some of his allies, according to people familiar with the talks. Some have argued that such a move would energize young voters. Others have urged caution and encouraged him to defer to Congress, while worrying about whether the administration has the legal authority to act on its own.

Mr. Biden has expressed skepticism about universal debt cancellation, opposing debt cancellation for people who attend elite private universities. He said he opposed canceling up to $50,000 of student debt for all borrowers and suggested his executive power was limited.

A January poll found that 49% of the public, including 70% Democrats, 44% independents and 25% Republicans, supported canceling student loan debt from public colleges and universities. Thirty-five percent of respondents said they were opposed and 17% said they were unsure.

Indebted Biden supporters have said in interviews they are growing impatient. While they welcomed Mr. Biden’s temporary extension of the pause on student loan payments, many said they worried about what would happen when that program expires.

Ryan Velez, of Louisville, Ky., is among Biden backers worried about what will happen with the expiration of a pandemic-related pause on student loan payments.


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Ryan Velez

“I have no confidence in Biden on this issue,” said Ryan Velez, 36, of Louisville, Ky., who voted for Mr. Biden in 2020. Mr. Velez said he had more than 150 $000 in student debt, a burden that affected every part of his life, from his relationships to his job prospects.

Beginning in 1990, Congress began to incorporate expected future loan repayments into its budgeting for student loan programs. Loans became a potential source of profit, assuming most borrowers would repay with interest. This prompted Congress to expand student loans. This would increase access to higher education, either at no cost to the government or with a gain in federal revenue, at least on paper.

Borrowing has surged, but repayment rates have fallen, especially in recent years. When repayments are lower than expected, the Treasury Department fills the void with cash injections to the Department of Education. In fiscal year 2019, before the pandemic repayment pause, the Department of Education’s federal student aid office predicted the need for a $124.5 billion injection.

Legal scholars and lawyers disagree on whether the administration could pursue broad student debt cancellation without congressional action. The debate centers on how the courts would interpret the powers of the Education Secretary under the Higher Education Act 1965, which allows the Secretary to ‘consent to the modification’ of loans and ‘compromise, waive or release” unspecified amounts of student debt.

Proponents of broad cancellation say the lack of explicit constraints in the law is deliberate, giving the executive branch flexibility to manage its dealings with borrowers. They note that former presidents of both parties have used the law to cancel debt on a more limited scale. “The power is there,” Ms. Warren said. “We just need the president to step in and use it.”

The Trump administration has argued that the law does not give the Department of Education carte blanche to do whatever it wants with the debt portfolio, sticking to the doctrine that Congress does not “hide elephants in mouse holes,” in the words of the late Supreme Court. Judge Antonin Scalia.

“Courts shouldn’t be able to read into statutes powers that Congress hasn’t explicitly granted to agencies,” said Reed Rubinstein, who served as acting general counsel for the Education Department under Mr. Trump and advised former secretary Betsy DeVos against global debt. forgiveness.

WSJ higher education reporter Melissa Korn breaks down the select groups of borrowers who are currently eligible for student debt relief and what borrowers can expect in 2022. Photo: Getty Images

The ambiguity of the law may be one reason the administration has yet to act. A series of redacted emails and memos were released by the Department of Education in August, showing the administration was grappling with the legal issue.

Biden administration officials said the administration is preparing a legal memorandum detailing the executive branch’s power to eliminate student debt. But the administration has not disclosed what the memo says, prompting more than 80 Democratic lawmakers, including Senate Majority Leader Chuck Schumer (D., NY), to pressure Mr. Biden to publish the document.

Studies show that canceling student debt could help black borrowers, who are more likely to face the long-term financial burdens of student loans. But a Brookings Institution study published last month argued that widespread student debt relief is regressive, calling the policy “an expensive and ineffective way to narrow economic gaps by race or socioeconomic status” because student debt is concentrated among the wealthiest households. . Instead, the study calls for more targeted and means-tested debt relief.

Another Brookings study estimated that taxpayers would pay $1.6 trillion to cancel all federal student debt. Relief of $50,000 per borrower would cost about $1 trillion and relief of $10,000 per borrower would cost about $373 billion.

If the administration were to pursue reversal, it could face a Supreme Court that struck down some of the administration’s broadest executive actions.

The administration could take a middle ground approach by initiating a regulatory process, with stakeholder participation, to put in place a debt cancellation program that targets those most in need.

“Administrative agencies have more leeway” with the courts when going through the regulatory process, said Harvard law professor Howell Jackson.

Write to Andrew Restuccia at [email protected] and Gabriel T. Rubin at [email protected]

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