UNITED STATES NEWS

Student loan help for millions coming from Biden after delay

Aug 23, 2022, 4:30 PM | Updated: Aug 24, 2022, 1:57 am

WASHINGTON (AP) — President Joe Biden on Wednesday is set to announce his long-delayed move to forgive up to $10,000 in federal student loans for many Americans and extend a pause on payments to January, according to three people familiar with the plan.

Biden has faced pressure from liberals to provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread forgiveness. The delay in Biden’s decision has only heightened the anticipation for what his own aides acknowledge represents a political no-win situation. The people spoke on the condition of anonymity to discuss Biden’s intended announcement ahead of time.

The precise details of Biden’s plan, which will include an income cap limiting the forgiveness to only those earning less than $125,000 a year, were being kept to an unusually small circle within the Biden administration and were still not finalized on the eve of the announcement.

Down-to-the-wire decision-making has been a hallmark of the Biden White House, but the particular delay on student loans reflects the vexing challenge confronting him in fulfilling a key campaign promise.

The plan would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more.

The nation’s federal student debt now tops $1.6 trillion after ballooning for years. More than 43 million Americans have federal student debt, with almost a third owing less than $10,000 and more than half owing less than $20,000, according to the latest federal data.

The continuation of the pandemic-era payment freeze comes just days before millions of Americans were set to find out when their next student loan bills will be due. This is the closest the administration has come to hitting the end of the payment freeze extension, with the current pause set to end Aug. 31.

Wednesday’s announcement was set for the White House after Biden returns from vacation in Rehoboth Beach, Delaware. The administration had briefly considered higher education schools in the president’s home state for a larger reveal, but scaled back their plans.

Biden was initially skeptical of student loan debt cancellation as he faced off against more progressive Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., who had proposed cancellations of $50,000 or more, during the 2020 primaries.

As he tried to shore up support among younger voters and prepare for a general election battle against then-President Donald Trump, Biden unveiled his initial proposal for debt cancellation of $10,000 per borrower, with no mention of an income cap.

Biden narrowed his campaign promise in recent months by embracing the income limit as soaring inflation took a political toll and as he aimed to head off political attacks that the cancellation would benefit those with higher take-home pay. But Democrats, from members of congressional leadership to those facing tough re-election bids this November, have pushed the administration to go as broad as possible on debt relief, seeing it in part as a galvanizing issue, particularly for Black and young voters this fall.

The frenzied last-minute lobbying continued Tuesday even as Biden remained on his summer vacation. Senate Majority Leader Chuck Schumer, D-N.Y., one of the loudest advocates in recent years for canceling student loan debt, spoke privately on the phone with Biden, imploring the president to forgive as much debt as the administration can, according to a Democrat with knowledge of the call.

In his pitch, Schumer argued to Biden that doing so was the right thing to do morally and economically, said the Democrat, who asked for anonymity to describe a private conversation.

Inside the administration, officials have discussed since at least early summer forgiving more than $10,000 of student debt for certain categories of borrowers, such as Pell Grant recipients, according to three people with knowledge of the deliberations. That remained one of the final variables being considered by Biden heading into Wednesday’s announcement.

Democrats are betting that Biden, who has seen his public approval rating tumble over the last year, can help motivate younger voters to the polls in November with the announcement.

Although Biden’s plan is narrower than what he initially proposed during the campaign, “he’ll get a lot of credit for following through on something that he was committed to,” said Celinda Lake, a Democratic pollster who worked with Biden during the 2020 election.

She described student debt as a “gateway issue” for younger voters, meaning it affects their views and decisions on housing affordability and career choices. A survey of 18- to 29-year-olds conducted by the Harvard Institute of Politics in March found that 59% of those polled favored debt cancellation of some sort — whether for all borrowers or those most in need — although student loans did not rank high among issues that most concerned people in that age group.

Some advocates were already bracing for disappointment.

“If the rumors are true, we’ve got a problem,” Derrick Johnson, the president of the NAACP, which has aggressively lobbied Biden to take bolder action, said Tuesday. He emphasized that Black students face higher debut burdens than white students.

“President Biden’s decision on student debt cannot become the latest example of a policy that has left Black people — especially Black women — behind,” he said. “This is not how you treat Black voters who turned out in record numbers and provided 90% of their vote to once again save democracy in 2020.”

John Della Volpe, who worked as a consultant on Biden’s campaign and is the director of polling at the Harvard Kennedy School Institute of Politics, said the particulars of Biden’s announcement were less important than the decision itself.

“It’s about trust in politics, in government, in our system. It’s also about trust in the individual, which in this case is President Biden.”

Combined with fears about expanding abortion restrictions and Trump’s reemergence on the political scene, Della Volpe said student debt forgiveness “adds an additional tailwind to an already improving position with young people.”

Republicans, meanwhile, see only political upside if Biden pursues a large-scale cancellation of student debt ahead of the November midterms, anticipating backlash for Democrats — particularly in states where there are large numbers of working-class voters without college degrees. Critics of broad student debt forgiveness also believe it will open the White House to lawsuits, on the grounds that Congress has never given the president the explicit authority to cancel debt on his own.

The Republican National Committee on Tuesday blasted Biden’s expected announcement as a “handout to the rich,” claiming it would unfairly burden lower-income taxpayers and those who have already paid off their student loans with covering the costs of higher education for the wealthy.

“My neighbor, a detective, worked 3 jobs (including selling carpet) & his wife worked to make sure their daughter got quality college degree w/no student debt,” Rep. Kevin Brady, R-Texas, the top Republican on the House Ways and Means Committee, tweeted Tuesday. “Big sacrifice. Now their taxes must pay off someone else’s student debt?”

Biden’s elongated deliberations have sent federal loan servicers, who have been instructed to hold back billing statements while he weighed a decision, grumbling.

Industry groups had complained that the delayed decision left them with just days to notify borrowers, retrain customer service workers and update websites and digital payment systems, said Scott Buchanan, executive director of the Student Loan Servicing Alliance.

It increases the risk that some borrowers will inadvertently be told they need to make payments, he said.

“At this late stage I think that’s the risk we’re running,” he said. “You can’t just turn on a dime with 35 million borrowers who all have different loan types and statuses.”

__

Associated Press writer Collin Binkley contributed from Washington.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

United States News

Associated Press

Tropical Storm Ophelia forecast to make landfall early Saturday on North Carolina coast

ANNAPOLIS, Md. (AP) — Tropical Storm Ophelia was expected to make landfall on the North Carolina coast early Saturday morning with the potential for damaging winds and dangerous surges of water, the U.S. National Hurricane Center said. Life-threatening flooding caused by the weather system was forecast for parts of eastern North Carolina and southeastern Virginia, […]

4 minutes ago

This Aug. 17, 2021 photo shows Quagga mussels cover the engine of a Bell P-39 Airacobra military pl...

Associated Press

Historians race to find Great Lakes shipwrecks before quagga mussels destroy the sites

MADISON, Wis. (AP) — The Great Lakes’ frigid fresh water used to keep shipwrecks so well preserved that divers could see dishes in the cupboards. Downed planes that spent decades underwater were left so pristine they could practically fly again when archaeologists finally discovered them. Now, an invasive mussel is destroying shipwrecks deep in the […]

2 hours ago

This image provided by Tulane University shows Nick Spitzer, host of the weekly public radio music ...

Associated Press

Louisiana folklorist and Mississippi blues musician among 2023 National Heritage Fellows

NEW ORLEANS (AP) — Louisiana folklorist Nick Spitzer and Mississippi blues musician R.L. Boyce are among nine 2023 National Heritage Fellows set to be celebrated later this month by the National Endowment for the Arts, one of the nation’s highest honors in the folk and traditional arts. Spitzer and Boyce are scheduled to accept the […]

2 hours ago

Republican presidential candidates, from left, former Arkansas Gov. Asa Hutchinson, former New Jers...

Associated Press

3rd Republican presidential debate is set for Nov. 8 in Miami, with the strictest qualifications yet

The third Republican presidential debate will be held in Miami on Nov. 8, a day after several states hold off-year elections.

4 hours ago

During the equinox, the Earth’s axis and its orbit line up so that both hemispheres get an equal ...

Associated Press

The fall equinox is here. What does that mean?

The equinox arrives on Saturday, marking the start of the fall season for the Northern Hemisphere. But what does that actually mean?

5 hours ago

(AP Photo/Moises Castillo, File)...

Associated Press

As migrants overwhelm a Texas border city, others wait in Mexico for appointments to enter the US

Some migrants who arrive at the border stop in Texas only stop for a quick meal before crossing the Rio Grande.

6 hours ago

Sponsored Articles

...

Ignite Digital

How to unlock the power of digital marketing for Phoenix businesses

All businesses around the Valley hopes to maximize their ROI with current customers and secure a greater market share in the digital sphere.

...

re:vitalize

When most diets fail, re:vitalize makes a difference that shows

Staying healthy and losing weight are things many people in Arizona are conscious of, especially during the summer.

...

Ability360

At Ability360, every day is Independence Day

With 100 different programs and services, more than 1,500 non-medically based home care staff, a world-renowned Sports & Fitness Center and over 15,000 people with disabilities served annually, across all ages and demographics, Ability360 is a nationwide leader in the disability community.

Student loan help for millions coming from Biden after delay