August 7, 2022

Reports: Biden student debt plan may forgive $10K per borrower

After much delay in making any moves on a bold promise made during his 2020 campaign, reports suggest that President Joe Biden may be on the verge of announcing a plan to cancel at least some of the $1.7 trillion in outstanding student loan debt, with a figure of $10,000 per borrower forgiven now emerging as a distinct possibility, as Breitbart reports.

Speculation has been ramping up in recent days that the president is very close to declaring his intentions around the highly controversial issue of student loan cancellation, with some having previously predicted that word might come as soon as this past weekend during a scheduled commencement address at the University of Delaware.

Though the White House has continued to emphasize that no final decision on the size or scope of any plan has yet been made, CNBC reports that the administration is leaning in the direction of erasing $10,000 in student debt per borrower, an amount far less than progressive activists had hoped would be forgiven.

Many on the left have argued for quite some time that the president needs to eliminate at least $50,000 in debt per individual borrower in order to achieve the desired economic impact, though Biden has stated recently that such a plan was not among those currently under consideration.

As such, the president remains at risk of angering members of his liberal base, with Thomas Gokey of the Debt Collective recently opining, according to CNBC, that forgiveness at the $10,000 level would amount to “an absolute insult,” as it is “less than what [Biden] promised on the campaign.”

NAACP president Derrick Johnson also expressed his dissatisfaction with the rumored forgiveness amount, saying that it “won’t do anything” for the Black constituency his organization represents. “The average Black borrower has $53,000 in student loan debt four years after graduation, nearly twice the amount as their white counterparts,” he said.

“Ten thousand dollars in cancellation would be a slap in the face,” Johnson continued. “President Biden, it’s not about whether you can do it, it’s about whether or not you have the will to do it,” echoing sentiments frequently expressed by left-wing lawmakers such as Senate Majority Leader Chuck Schumer (D-NY), Sen. Bernie Sanders (I-VT), as well as Reps. Rashida Tlaid (D-MI), Ilhan Omar (D-MN), Pramila Jayapal (D-WA), and Alexandria Ocasio-Cortez (D-NY).

Those in factor of more substantial debt forgiveness are not the only Americans likely to stand in opposition to whatever Biden’s compromise position ultimately turns out to be, as there is likely to be significant backlash from individuals who have already repaid their debts, those who worked their way through school, and those who never attended college at all and incurred no such debt, as higher education expert Mark Kantrowitz explained to CNBC in an article last week.

As he has done on a number of issues, Biden backed himself into something of a corner on the 2020 campaign trail when it comes to student debt, but it remains to be seen if any forthcoming attempt to spend his way out of trouble will actually succeed in appeasing his increasingly disillusioned base or will ultimately end up alienating almost everyone.

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2 months ago

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