What Biden is considering for student debt

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WASHINGTON – The Biden administration has entered the White House in a bid to ease the strain on student loan debt, especially amid the added financial burden of the coronavirus pandemic.

On the first day of his term, President Joe Biden signed an executive order extending a break in federal student loan payments passed by the previous administration as part of COVID-19 relief. Liberal activists and lawmakers have urged the president to go further and cancel student loan debt, but he has firmly said he does not believe he has the power to do so by executive order.

That changed on Thursday, when White House Chief of Staff Ron Klain said Biden had asked his Education Secretary to explore the president’s power to write off student loan debt, a sign that ‘he was ready to move left on the issue.

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Critics of student debt cancellation, including conservatives and some liberals, argue that it would unfairly benefit high-income people with a university education and that people who took out loans have a responsibility to pay them back, whatever the circumstances.

Although Biden was reluctant to bypass Congress on student debt cancellation, he has said from the days of his campaign that the government must help those with “debilitating” student debt.

“I understand the impact of debt,” he told a CNN town hall in February.

Biden said student loans should have 0% interest – a move he passed alongside freezing repayments until September. It expanded student loan cancellation for public sector workers and forgiven student debt defrauded by for-profit schools.

He is reluctant to write off the debt of those who have gone to top schools. The federal government should not write off the debt of students who attended elite schools such as “Harvard and Yale and Penn,” Biden said.

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On Thursday, Klain said Biden asked Education Secretary Miguel Cardona to write a note on the president’s executive power to write off student loan debt.

“He will look at that legal authority, he will look at the policy issues around it and he will make a decision,” Klain said in an interview with Politico Playbook.

Enacting student loan cancellation through Congress could be difficult in an equally divided Senate.

College costs are on the rise

College costs have risen steadily over the past few decades, making the price of higher education almost unaffordable without the help of student loans for many.

Students were told that successful lives depend on higher education. First year students respond to a national UCLA survey placed more importance on making more money and getting a better job as reasons to go to college in 2019 than students of the past 45 years. But the high cost of a college education has increased the debt graduates must evade early in their careers.

Higher education poses a significant financial challenge.

Higher education poses a significant financial challenge.
Sean Rayford / Getty Images

Analysis of US News and World Report of its nationally ranked universities shows that over the past 20 years, average tuition fees at private colleges have increased by 144%; in public universities for foreign students by 165%; and in public universities for state students by 212%.

Data collected by the College Council shows that, after adjusting for inflation, over the past two decades, tuition and average fees at public four-year institutions have increased by over $ 5,000 and at private colleges and universities by over $ 5,000. $ 13,000 per year.

This school year, the College Board found that the average first-time full-time student in a four-year public college must pay $ 14,850 in tuition, fees, and post-grant board. The average student at a private institution must cover $ 29,110 after the grant. This does not include additional costs such as books, supplies and transportation.

Americans hold about $ 1.7 trillion in student loan debt, according to Federal Reserve data. The average 2019 graduate of private or public colleges has an average debt of $ 28,950, according to the Institute for Access and Success in Colleges.

“The more university fees increase, the more diplomas become a measure [of] privilege rather than jurisdiction. Our country would be better off if we made public colleges tuition-free and canceled student loan debt, ”tweeted Rep. Alexandria Ocasio-Cortez, DN.Y ..

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Liberals want Biden to forgive $ 50,000 in student debt

Citing the growing debt of generations of college graduates, Democrats asked Biden to pledge $ 50,000 per federal borrower on student loans, pressuring him to bypass Congress by resorting to the executive action.

Student loan debt hit a record high in 2020 of over $ 1.7 trillion. The average graduate hit a record loan debt of over $ 30,000 in 2019 for the first time since US News and World Report data tracking, whose debt is on average more than $ 6,000 higher than that of a graduate detained 10 years earlier.

Previous presidents, including Barack Obama and Donald Trump, have granted student debt relief.

Biden said student debt cancellation should be justified against other political priorities.

“Is this going to be forgiven, rather than using this money to provide money for the early education of young children who come from disadvantaged situations?” Biden asked CNN’s town hall.

Students graduate from City College on June 3, 2016 in New York City.  The debt of many graduates upon leaving university has continued to climb.

Students graduate from City College on June 3, 2016 in New York City. The debt of many graduates upon leaving university has continued to climb.
Spencer Platt / Getty Images

Senate Majority Leader Chuck Schumer, DN.Y., and Senator Elizabeth Warren, D-Mass., Said they believe the president has the power to cancel $ 50,000 in loans, and they l ‘urged to do so immediately.

“Studies show that canceling student debt can dramatically increase the wealth of black and Latin households and help close the racial wealth gap, bringing immediate relief to millions of people struggling during this pandemic and recession , and give our struggling economy a boost with an economic stimulus that can lead to higher home purchase rates and stability, higher college completion rates and greater job creation. small businesses, ”the pair said in a statement last fall.

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“Even before the coronavirus pandemic plunged our economy into chaos, student borrowers were already in crisis,” Warren said.

Ocasio-Cortez rebuffed Biden’s view that student debt cancellation could come at the expense of other education programs. “Nowhere does it say we have to trade early childhood education for student loan cancellation. We can have both, ”she said.

“Many will not fully feel $ 10,000 in forgiveness until the end of Biden’s presidency, when they have spent 10 years repaying the remaining $ 20,000,” Ocasio-Cortez tweeted. “The demons should stand for a policy that people can feel as soon as possible. We have to go big. “

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