President Joe Biden is reportedly delaying a decision on student loan debt cancellation due to inflationary concerns
President Joe Biden is delaying his decision on whether to cancel a substantial amount of federal student loan debt until July or August, it was reported on Monday.
The president promised on April 28 to have an answer ready in ‘the next couple of weeks.’
Earlier that month, Biden had extended a moratorium on student loan payments and interest that was in place since March 2020 due to the COVID-19 pandemic.
But now he’s choosing to move his announcement closer to when that extension expires at the end of August, officials told the Wall Street Journal.
And he is reportedly leaning toward his campaign pledge of canceling $10,000 per borrower, the report states.
It also suggests Biden has been hesitant to act thus far due to sky-high inflation – which hit 8.3 percent in April – and not wanting to appear to be contributing to continuously rising prices.
If true it’s a departure from the public show of confidence the commander-in-chief has sought to project about the economy, including claiming to have presided over ‘the most robust recovery in modern history’ on Twitter on Monday.
Roughly 40 million Americans hold a collective $1.6 trillion in federal student loan debt. In a testament to the system’s failings, roughly a quarter of those borrowers were already behind on payments when the pandemic hit.
Biden canceling $10,000 per borrower would wipe debt for about a third of debt holders.
It would also exceed what the government has spent on federal food subsidy programs for public school students as well as pregnant women and infants over the last 20 years, according to an analysis by the Brookings Institute.
If he acted on the plan later this summer it would likely come with an income cap of around $125,000, the Journal reported.
That’s just one of several proposals reportedly on Biden’s desk, which now just await his approval or dismissal.
Progressives and other supporters of Biden have renewed calls for executive action on some of the $1.6 trillion in student loan debt held by roughly 40 million borrowers
They’ve also called on him to cancel more debt beyond his campaign trail pledge of $10,000 per borrower
Progressives who helped get Biden into office have ramped up calls in recent months to take executive action on wiping student loan debt, citing partisan gridlock in Congress that would make it impossible for legislation to pass.
Biden’s also grown more receptive to those pleas, officials told the Journal.
But Republicans are virtually in lock-step opposition to the initiative, citing the burden it would place on American tax payers – particularly those who did not obtain a college degree.
House GOP Leader Kevin McCarthy criticized the $10,000 forgiveness plan in comments to DailyMail.com. when it was first reported on in April.
‘To distract from his flailing agenda, President Biden is looking to have working Americans pay thousands toward the college degrees of high-income earners,’ McCarthy said.
‘This latest stunt will cost taxpayers hundreds of billions, force Americans who did not go to college to subsidize the degrees of the elite, drive up higher education costs for future generations, and exacerbate inflation even more.’
He concluded, ‘The Biden administration isn’t interested in solving problems – they just want to placate to their progressive base while they leave working Americans paying the tab.’
Canceling even $10,000 per borrower in student debt would be nearly as much as the federal government has spent on welfare over 20 years
Biden had already rejected a proposal led by nearly 100 lawmakers including Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren to cancel as much as $50,000 per borrower.
That would still have totaled roughly $1 trillion, according to the Brookings analysis.
It’s more than the U.S. government has spent on supplemental social security income and housing assistance programs respectively across a 20-year period.
The president in turn has reportedly called on Congress to enact more lasting legislation to reduce student loan debt and fix the system – though it’s highly unlikely such a bill could get support from the 10 Republicans needed to overcome a filibuster in the Senate.
Earlier this month Biden took action to wipe roughly $5.8 billion in federal student loan debt for borrowers who attended the now-defunct for-profit university chain Corinthian Colleges.
The move erases debt for more than half a million people, the largest such action in the Education Department’s history.
‘As of today, every student deceived, defrauded and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris Administration has their back,’ Education Secretary Miguel Cardona said. ‘For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep.’
