Joe Biden publicly trashed student debt forgiveness. But behind the scenes, he made Democrats hopeful. – Mother Jones
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At the end of last week, things did not look promising for student loan borrowers, hoping President Biden would write off much of their debts.
First there was Biden interview with New York Times columnist David Brooks, who described Biden as “suspect” of sweeping debt cancellation plans, such as those favored by the senses. Elizabeth Warren (D-Mass.) And Chuck Schumer (DN.Y.) who would write off up to $ 50,000 per borrower. “The idea that you go to Penn and pay a total of $ 70,000 a year and the public should pay for it?” I don’t agree, ”Biden said. Then the Washington postreported that the White House’s budget proposal, slated for this week, would not include the cancellation of student debt, breaking a campaign promise to write off $ 10,000 through an act of Congress. Last month Schumer Told the New York Times that he remained “at odds” with Biden on student debt.
But on Capitol Hill, last week’s budget news left the most ardent defenders of debt cancellation unfazed. “Did you expect it to be in there?” mocked an aide to a senior Democratic senator in favor of the cancellation when I texted about the To post story, doubtful Biden would actually announce such a policy through his budget. If anything, those Democrats were happy in private: The president’s absence from the budget – which is essentially just a wishlist for what Biden wants Congress to pass – left open the possibility that he could use executive powers to cancel student debt, as Schumer and Warren have called. Yes, Biden has reneged on his campaign promise – perhaps replacing it with something closer to what defenders want.
It’s still early days, but some early steps since Biden’s time in the White House indicate he’s more ready to recognize that the country’s $ 1.7 trillion outstanding student loans are the result of a system. broken and punitive. It may not quite hit the $ 50,000 mark the progressives demand – or even any sort of large-scale cancellation – but it has, through administrative hires and early executive action, demonstrated that he was thinking about the question. But he faces a looming deadline that could see progressives backfiring on him if he hasn’t made progress on forgiveness.
Biden first attempted to resolve the issue by extending the pause on student loan payments that had started under President Trump until the end of September. In April, Education Secretary Miguel Cardona joined Schumer and Warren for a roundtable with indebted borrowers to discuss debt cancellation, a tacit acknowledgment of the scale of the problem by a member of the president’s cabinet. “You share your story … helps create a picture of what it is”, Cardona mentionned after hearing the borrowers’ remarks. And earlier this month, Biden appointed Richard Cordray, a strong advocate for consumer rights, to oversee the federal student aid program, applauded a recruit as supportive of their cause.
Cordray was the first director of the Consumer Finance Protection Bureau from 2012 to 2017, where he built a reputation as a rigorous watchdog of student lending practices. He is a close ally of Warren, who created the CFPB and has fought aggressively both the Department of Education and the White House on student debt issues since joining the Senate in 2013. Advocates consider him as a key player in promoting the case for annulment. : The office he now heads stores data on student borrowers, much of which has never been made public. “By accessing different research, he can prove the point of debt cancellation,” says Natalia Abrams, executive director of Student Debt Crisis.
In March, ahead of Cordray’s hiring, the Education Department announced it would provide full debt relief to about 72,000 students defrauded by for-profit ‘diploma mill’ colleges, overturning a rule. of the Trump era which offered only partial relief based on the wealth of borrowers. . He also took steps to forgive the debts of 400,000 borrowers who had become completely disabled after graduation, which these borrowers are entitled to under the law, but found it difficult to access due to bureaucratic hurdles enacted. by the Department of Education under Trump’s Education Secretary Betsy DeVos. The decision had not completely appeased the activists. dodged a simpler forgiveness process than they had in place – but hiring Cordray offers the promise that future decisions will put borrowers at the heart of things. “If people are to be in debt, they need to be protected from managing agents, collectors and lenders,” says Seth Frotman, executive director of the Student Borrower Protection Center, an advocacy group, and former student loan ombudsperson at the CFPB which worked closely with Cordray.
And there is still a long way to go. Hundreds of thousands of additional fraud claims remain unresolved, and in many cases the Department of Education is still defending lawsuits against fraudulent borrowers against DeVos, which cripple anti-fraud programs. and laugh at the “so-called free money” Borrowers are legally owed. Business could be dropped as Cardona overturns Trump-era policies – a process that launched on Monday – but this cannot be done when the payment break is lifted. “We shouldn’t be repaying payments until we make sure people who have been conned by their schools get the relief they deserve,” says Frotman. Cancellation hopes underscore that canceling large swathes of debt could help alleviate all of these problems – if for no other reason than it would reduce the size of the outstanding loan portfolio.
Meanwhile, the White House request Cardona last month to write a memo on the president’s power to write off up to $ 50,000 in debt, and asked the Justice Department see again the legality of such a move earlier this year. Supporters questioned the need for such a review, given that Presidents Barack Obama and Donald Trump have used their executive power to relieve the debt of narrowly defined groups of borrowers. But it is for this reason that there is optimism that the memos, expected overnight, will confirm that the president can write off large swathes of debt. (A spokesperson for the Department of Education said in a statement: “We are working closely with the Department of Justice and the White House as quickly as possible to examine all options regarding the cancellation of student debt. . ”)
Legal status is one issue, but political will is another. Biden’s portrayal of an Ivy League graduate with the silver spoon looking for a government document is not helpful from an advocates point of view – and is not far from how the Republicans in Congress speak. Schumer, Warren, and their allies in the House and Senate rebutted this characterization, pointing out that it is low-income borrowers – and especially black and brown students – who shoulder the debt disproportionately, and that the cancellation of the debt would go a long way in reducing the debt. the racial wealth gap, a stated goal of Biden’s White House. Black college graduates owe an average of $ 25,000 more than their white counterparts, according to National Center for Education Statistics research. “A degree on a black resume doesn’t give the same returns as the same degree on a white,” Darryl, a young man who owes $ 90,000 in student debt, told Cardona during the roundtable with Warren and Schumer.
Timing can force the problem. The break on payments and interest on loans will expire at the end of September. Cardona has not excluded extend the deadline, but if this break is do not extended without any associated cancellations, Democrats will hold the sack to bring back the payments of millions of loans, which come back to haunt them in the 2022 midterm election. Capitol Hill cancellation boosters reminded Biden of the political drawbacks : Warren and other Congressional Democrats sent the Department of Education a seriesofletters questioning his plans to start repayments, hoping that a steady drumbeat will keep the focus on political pressures. “It’s the same argument as checks,” Schumer told the Time in April, referring to the hugely popular direct payments Americans received from COVID relief programs. “Are you helping the middle class people who are at this dead end?”
Schumer was instrumental in ensuring that a last-minute provision was inserted into the COVID relief package to ensure that any canceled student debt, if Biden answers their call, is tax-exempt. He’s used to treating his face masks like lucky lawmakers talismans, noting a few weeks ago that every mask he wore with a bill slogan – “Save Our Stages,” “#SaveRestaurants”, “#StopAsianHate” – all passed the Senate. “I’m going to have to start wearing a lot more masks that talk about legislation!” Schumer joked last month. Lately he’s kept his “#CancelStudentDebt” cover spinning heavy.