President Biden is considering various options for forgiving an indefinite but significant federal student loan debt – a move that would excite some of his most loyal supporters and financially troubled students across the country, but deviates from the campaign’s campaign for limited relief. .
The president shared his plans during a 90-minute meeting at the White House on Monday with members of the Spanish Congressional Group, CBS News participants said. The move could affect more than 43 million borrowers who hold more than $ 1.6 trillion in federal student loans, the second largest debt of Americans after mortgages.
Representative Tony Cardenas, a California Democrat who attended the meeting, said the president was open to forgiving the debt of students, whether they visited a public or private institution.
“The president never mentioned the amount, nor did the president say he would delete all student duties,” Cardenas said. “He held a dialogue with us about the difference between young people who go to public or private schools, and we, the members of the CHC, said that we should focus on both. And he said, “Okay, it’s good to know.”
Cardenas said he had reiterated to Mr Biden that the Spanish group supported enforcement action that would have forgiven at least $ 10,000 in college debt if Congress could not pass legislation to do so.
In response, Cardenas said the president smiled and said, “You’re going to like what I’m doing, I’m looking to do something about it, and I think you’re going to like what I’m doing.”
“We look at it in terms of whether they needed help to get through college and take on debt, it doesn’t matter,” Cardenas added.
Earlier this month, the White House said it was extending the pandemic-era break for federal student loan payments until Aug. 31, a move that helped approximately 41 million borrowers save $ 5 billion in interest payments a month, according to the education ministry. .
At a White House briefing on Monday, spokeswoman Jen Psaki reiterated that the administration would decide to cancel some student loan obligations between now and the end of August, or the break would be extended further. The president has said in the past that he supports the cancellation of a student loan debt of up to $ 10,000. Psaki said he had nothing to visualize on the issue or how the cancellation of student loan debt would work.
Shortly after Psaki’s briefing and just down the corridor in the West Wing, the topic of student loans appeared at the president’s meeting with Latin American lawmakers, an exchange that included a detailed discussion on immigration policy, environmental justice and the upcoming midterm elections.
When Hispanic Caucus members mentioned student loans, the president said he had asked his aides to explore his options – a signal to lawmakers that he may be willing to go further than he promised during the campaign.
“They are considering different options for what they can do. To forgive him completely. That was our request,” said one of the deputies present, who asked for anonymity to speak openly about the meeting.
It was not immediately clear how soon the president could act, but the August 31 deadline, set just before early voting will begin in several states before the interim terms, is seen by many Democrats as a natural time to make such a statement.
“As for the president’s exit and the talk of canceling a student loan with different groups, I think that’s a very good sign,” said Cody Hunanian, executive director of the Student Debt Crisis Center. “I think the president is beginning to realize that student cancellation is very popular. It’s very popular with certain groups of voters that the president has to win in the upcoming election, and the fact that he’s using debt cancellation as a tool to talk to these communities is a small change for me. “
Hunanyan noted that the White House has said it has been investigating the cancellation of student debt for some time. The ongoing public announcement that the administration is considering it, continuing to extend the payment break, is confusing for borrowers, he said.
Biden officials are investigating whether the president has the power to enforce a federal student loan debt through executive action since the president took office more than a year ago.
“This argument boils down to whether Biden – or any president, in that sense, according to the law – will violate federal status by making a broad remission of student loans other than what he did under existing programs. Said Betsy Mayot of the Institute for Student Loan Advisors. “There are some people who say he has the power under the law to do it, and there are people who say that except for a small part of Perkins’ loans, he doesn’t.
The Perkins program, which lends low-interest loans to low-income students, stopped lending in 2017.
Cancellation of student loan debt will also depend on whether a group or an individual disputes the action. Such a move could lead to a confusing legal battle that leaves borrowers in the dark for a while. That’s why the White House and some experts and student loan officers have suggested that lawmakers be the ones to take action, as the legislation will not face the same legal challenges. But a tightly divided Congress is unlikely to pass a bill on the issue.
“Eventually, it will be overturned through this approach,” said student loan expert Mark Cantrowitz on canceling student loan debt through enforcement action. He argued that the best way to forgive the debt would be through the regulatory process, which he said was a slower process but “much more likely to survive legal challenges”.
During his presidential campaign, Mr. Biden said he supported the cancellation of $ 10,000 in student loan debt and congressional action. But some senior Democrats have called on him to go further and use enforcement action to cancel a $ 50,000 student loan debt to a borrower.
“President Obama has done it, President Trump has done it, and President Biden has done it many times. The power is clearly there,” Sen. Elizabeth Warren, a Democrat from Massachusetts, told CBS’s Face the Nation on Sunday.
In a new analysis, the Federal Reserve Bank of New York estimates that canceling a $ 50,000 student loan debt would forgive the full balance sheet for nearly 30 million federal student loan borrowers. The average forgiveness would be more than $ 23,800 per borrower. The relocation will cost about $ 904 billion. But some of the money, defenders say, has been out for decades.
Proponents of student loan debt cancellation also argue that this is a way to build racial equality. Studies show that black borrowers often have to take out larger amounts of student debt for higher education. After graduation, the average student debt held by black borrowers is higher than the burden on white and brown borrowers, studies have found.
Race, as well as providing economic assistance to younger working-class Americans burdened by debts they may not have fully understood when seeking loans, are major reasons why members of the Spanish-speaking Caucasus continue to push for relief. loans.
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Ed O’Keefe
Ed O’Keefe is a senior in the White House and a political correspondent for CBS News, based in Washington, DC
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