Former Vice President Joe Biden pledged during the 2020 campaign that if elected president he would tackle the issue of 43 million Americans owing $1.7 trillion in student loan debt. But Democrats, who hope a Biden presidency will usher in left-wing policies, don’t like his plan for partial forgiveness and legislative remedies.
Many in the growing far-left of the Democrat Party want Biden to do away with all student loan debt on his first day in office.
“In this moment of national reckoning on racial injustice, the president-elect must cancel all federal student debt on Day 1 of his administration,” Rep. Ayanna Pressley (D-MA) said in a statement. “The president-elect must meet the moment. If he fails to, we will hold him accountable.”
“There are a lot of people who came out to vote in this election who frankly did it as their last shot at seeing whether the government can really work for them,” Rep. Pramila Jayapal (D-WA), chairwoman of the Congressional Progressive Caucus, said in a New York Times article. “If we don’t deliver quick relief, it’s going to be very difficult to get them back.”
Sens. Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) wrote in a recent op-ed that $50,000 debt forgiveness for individuals would give “black and brown families across the country a far better shot at building financial security” and would also serve as an economic stimulus.
“More than 200 organizations — including the American Federation of Teachers, the NAACP and others that were integral to his campaign — have joined the push,” the Times reported,
The Times reported on the conflicting approaches on solving the student loan debt problem:
The Education Department is effectively the country’s largest consumer bank and the primary lender, since 2010, for higher education. It owns student loans totaling $1.4 trillion, so forgiveness of some of that debt would be a rapid injection of cash into the pockets of many people suffering from the economic effects of the pandemic.
Many economists, including liberals, say higher education debt forgiveness is an inefficient way to help struggling Americans who face foreclosure, evictions and hunger. The working poor largely are not college graduates — more than 70 percent of unemployed workers do not have a bachelor’s degree, and 43 percent did not attend college at all, according to a report by the Committee for a Responsible Federal Budget.
While many Black students would benefit greatly from even modest loan forgiveness, debt relief overall would disproportionately benefit middle- to upper-class college graduates of all colors and ethnicities, especially those who attended elite and expensive institutions, and people with lucrative professional credentials like law and medical degrees. An October analysis by the Brookings Institution found that almost 60 percent of America’s educational debt is owed by households in the nation’s top 40 percent of earners, with an annual income of $74,000 or more.
It would also be expensive — “canceling even $10,000 per person in debt would eliminate more than $400 billion in government assets, although calculating the true cost to the Treasury is tricky because of student loans’ long repayment time and high default rate,” according to the Times.
The report said that high college tuition also should be addressed.
“The real problem is the cost of higher education,” Betsy Mayotte, president and founder of the Institute of Student Loan Advisors,” said. “Unless you’re going to solve the problem, forgiveness is just throwing away money.”
Biden’s campaign platform said he backed the idea of making public universities tuition-free for families making less than $125,000 a year.
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