Biden will call on Congress to forgive $10,000 in student debt for all borrowers

joe biden

President-elect Joe Biden will ask Congress to immediately cancel $10,000 in student debt for all borrowers and to extend the payment pause that’s scheduled to lapse this month, an aide told reporters Friday afternoon.

The $900 billion pandemic aid package passed in December didn’t include an extension of the payment pause for student loan borrowers that has been in effect since March and expires at the end of the month, concerning advocates who say the financial pain wrought by the pandemic has left many borrowers unable to make their payments.

In a recent Pew survey, 6 in 10 borrowers said it would be difficult for them to start paying their student loan bills again in the coming month. The vast majority — or around 90% — of federal student loan borrowers have taken advantage of the government’s option to pause their payments during the pandemic, data shows.

It remains unknown for how long the payment pause will be extended by Biden.

The president-elect’s commitment to forgiving $10,000 in student debt falls in line with his promises on the campaign, although he’s facing mounting pressure to cancel more of the debt and to bypass Congress to do so.

Administrative or legislative forgiveness

The Senate’s top Democrat, Chuck Schumer, D-N.Y., is calling on Biden to forgive $50,000 per borrower on the first day of his presidency. “All you need is the flick of a pen,” Schumer said in December. “You don’t need Congress.” 

Meanwhile, Sen. Elizabeth Warren, D-Mass., recently described student debt forgiveness as “the single most effective economic stimulus that is available through executive action.”

Not everyone agrees. Experts say Biden would likely run into court challenges if he moved to cancel the debt on his own.

And now that Democrats have secured a majority in Congress, the legislative path may seem more hopeful. Yet there’s a long road from hopeful to borrowers seeing their debts reduced or eliminated.

Even with the two Senate seats Democrats picked up in Georgia, the party just eked out a majority, and will need Vice President-elect Kamala Harris to step in to rally 51 votes against Republicans’ 50.

Not all Democrats may be on board for student debt forgiveness and even if they were, procedural rules in the Senate generally require legislation to garner 60 votes. It will be hard to get nine Republicans in support of a debt jubilee.

“With Democratic control of government, the Republicans are likely to re-assert their interest in the federal deficit and government spending,” said Laurel Harbridge-Yong, associate professor at Northwestern University.

Source: https://www.cnbc.com/2021/01/08/student-loan-forgiveness-could-be-more-likely-but-challenges-remain-.html

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