Democratic senators divided over student loan debt cancellation


Democratic senators are divided over whether President-elect Joe Biden should act unilaterally to write off student debt when he takes office, possibly reflecting how far the progressives are from persuading the new administration of fully embrace their platform and how uncertain the party is about what Biden will be able to accomplish.

Senator Elizabeth Warren (D-Mass.) And Senate Minority Leader Chuck Schumer (DN.Y.) have both pushed for Biden to ask the Education Secretary to write off billions of dollars in student debt. up to $ 50,000 per borrower on his first day in office, with the aim of immediately boosting an economy still struggling through the coronavirus pandemic. Eleven other Senate Democrats backed Schumer and Warren’s resolution.

It is unclear whether Biden, who has taken a more limited view of reducing student debt as part of a legislative proposal to jumpstart the economy, sees his plan as legally doable, politically smart, or good policy. With Senate control still uncertain, and Senate Majority Leader Mitch McConnell (R-Ky.) So far refusing to acknowledge Biden’s victory, the feasibility of many of Biden’s bolder proposals remains unclear. suspense. (Republicans are expected to have a majority in the upper house next year, unless Democrats can sweep two January elections in Georgia.)

The intra-Democrat argument about eliminating student loan debt and more broadly about pursuing unilateral action on the economy – is likely to recur again and again under the Biden administration, with progressives arguing that bolder action will improve the economy and stimulate the enthusiasm of Democrats and moderates. worry about alienating convincing centrist voters.

Eliminating student loan debt isn’t the only way progressives are pushing for Biden to stimulate the economy from his first day in office, with or without help from Congress. In a Washington Post editorial published last week, Warren also suggested lowering prescription drug prices; declaring a national emergency on climate change, which could free up money for green energy projects; and increase the minimum wage to $ 15 for employees of federal contractors.

“I think he should start with the mother of all executive orders to clear the decks for the work that needs to follow,” said Sen. Sheldon Whitehouse (DR.I.). “The more he can clarify with a swift executive order, the faster we can work together on other bipartisan or controversial issues.”

Senator Angus King, an independent from Maine who caucuses with Democrats, was much more skeptical and suggested that Biden should instead focus on renewing the Trump-era suspensions of student loan payments that expire during the news. year.

“It would have huge tax consequences,” King said of eliminating student debt. “I don’t think forgiveness quite [makes sense]. “

But it was Senator Bob Casey (D-Pa.), A close ally of Biden, who perhaps best summed up the dilemma facing the new president.

“I think it’s best to do something bipartisan but statutory,” Casey said, echoing Biden’s wish to work with Republicans in Congress. Then the senator quickly followed by embracing the overall goal of the progressives: “If he has authority, of course.” It would be great for a lot of students.

At a press conference Monday, Biden responded to a question about student debt relief by reiterating the post he has held since March: he supports legislation to immediately write off $ 10,000 in debt per person and eliminate any undergraduate student debt for people earning less than $ 125,000. one year and who attended public or historically black colleges and universities.

“It delays people,” Biden said of young adults struggling with debt. “They are in real trouble. They have to make choices between paying their student loans and paying the rent, those kinds of decisions. It should be done immediately.

Biden has also proposed making public colleges free for families with incomes below $ 125,000 a year, expanding Pell scholarships for low-income students, correcting the country’s massively dysfunctional loan cancellation program. federal government for people in public service jobs and to create income-based repayment plans for student borrowers.

About 45 million Americans have a combined student debt of $ 1.5 trillion, and owe a median amount of $ 17,000 with a median payment of just over $ 200 per month. The country’s collective debt burden has increased in recent years, due both to reduced state support for public universities and soaring administrative costs. The crisis has exacerbated the racial wealth gap, with black students often borrowing far more than their white counterparts.

Progressive groups see Biden’s actions on student loans as an early test, suggesting the action amounted to a “show of good faith,” in the words of the co-founder of the Campaign for Progressive Change committee, Adam Green .

“Mitch McConnell has a vested interest in keeping Joe Biden’s accomplishments low so that enthusiasm and popularity is low halfway through,” Green said. “But something bold – like forgiveness for student debt during this coronavirus crisis – could capture voters’ imaginations and put Democrats firmly on the side of the ordinary people, which is where the Biden administration wants to be. . ”

On the other hand, Lanae Erickson, senior vice-chair of the moderate Democratic group Third Way, said the party should refrain from focusing on helping college graduates – which she said could further alienate voters from the working class who are moving away from the party and doing little to help the most vulnerable.

“It’s clear that the education gap is bigger than ever. If Democrats want to win back non-university voters in the future, then spending all your political capital on helping people with higher education is not a smart idea, ”Erickson said. “This will only reinforce the perception that Democrats only care about the elite.”

Public polls have generally shown narrow majorities or pluralities of Americans in favor of student debt relief, with the results often depending on the specific wording of a pollster.

Progressives are skeptical of the widespread backlash from voters without a college degree, saying any plan to eliminate student debt would likely be paired with other actions to boost the economy at large. Warren and Schumer’s resolution calls on the president to ensure that the benefits do not flow to “the richest” borrowers.

Most Democrats haven’t questioned whether Biden’s administration would have the ability to act unilaterally on student debt. Warren and other supporters of the idea have long said the Education Secretary has broad authority over loans and noted that the Trump administration relied on that authority to suspend interest and payments during the period. pandemic.

Republicans are much more skeptical that Biden could unilaterally write off student loan debt, a proposal they typically oppose.

Sen. Mike Crapo (R-Idaho), who chairs the Senate Banking Committee, questioned the “legal argument” that a president has to forgive student loan debt by executive order. Senator Marco Rubio (R-Fla.) Called student loans a “big problem in this country”, but said he was careful not to do something that could have “unintended consequences”.

Senator Pat Toomey (R-Pa.), Another member of the Banking Committee, said he strongly opposes the cancellation of student loans.

“What about all the other categories of debt that wouldn’t just be canceled? What about the fact that some children who borrow money come from very wealthy families? Are you also going to cancel their loans? It doesn’t make sense to me, ”Toomey told HuffPost.

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