Pressure builds on Biden ahead of student loan cliff

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President Joe Biden walks on the South Lawn of the White House on December 12, 2021 in Washington, DC. The first family spent the weekend in Wilmington, Delaware. (Photo by Tasos Katopodis/Getty Images)

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WASHINGTON (The Hill) – In recent days, the White House has drawn widespread blowback as advocates and progressives implore the administration to push back, or forego entirely, a February date to lift a pandemic forbearance on student loan payments. President Biden is facing an avalanche of pressure over his administration’s plans to require millions of Americans to resume student loan payments in the coming weeks.

“This is going to be a hard blow to people who have struggled throughout this pandemic. It’s the wrong move,” Sen. Elizabeth Warren (D-Mass.) said this week. Student loan payments were initially paused nationwide in March 2020 under a moratorium enacted by then-President Trump, which has been extended several times under the Trump and Biden administrations. 

Biden last extended the hold in the summer through Jan. 31, 2022 in what the administration described then as the “final extension.” And, despite growing calls from progressives calling for another extension in light of the ongoing pandemic, the White House hasn’t moved from its position in recent days.

“We’re still assessing the impact of the Omicron variant, but a smooth transition back into repayment is a high priority for the administration,” White House press secretary Jen Psaki said on the matter last week.

Those comments have become fodder for criticism on social media and added fuel to a continued push by progressives urging the president to use his executive power to unilaterally cancel student loan debt. Biden has pushed in the past to cancel up to $10,000 in student loan debt for individuals, saying in February he was “prepared to write off” the amount, while also pushing back on calls by other top Democrats to go higher or forgive all federal student loans entirely.

But there are divisions among Democrats over whether Biden even has the power to take unilateral action on the issue. Speaker Nancy Pelosi (D-Calif.) said in July that Biden “can postpone, he can delay, but he does not have that power”, adding “that would best be an act of Congress.” But Warren and other progressives have maintained since then that Biden could forgive federal student loans with the stroke of a pen.

White House chief of staff Ron Klain said in April that the administration planned to produce a memo on Biden’s legal authority on the issue within a few weeks. “And then he’ll look at that legal authority, he’ll look at the policy issues around that, and he’ll make a decision,” he said.  

Rep. Ilhan Omar (D-Minn.) recently led a group of lawmakers in October calling for the memo to be released to the public. Rep. Ayanna Pressley (D-Mass.), who also signed onto the letter at the time, said communication with the Biden administration remains “ongoing” on the issue. 

In the first year of Biden’s presidency, his office has touted its approval of “more than $11.5 billion in loan cancellation for over 580,000 borrowers.” But that forgiveness extends only to certain cases, including borrowers with total and permanent disabilities, those who attended now-defunct schools, or public service workers. Many have cheered the actions made by the administration so far.

“Is it as big as forgiving $10,000 of debt for everybody? Or forgiving outright $1.6 trillion? No. But in a normal year, I think these would be really big steps forward,” Justin Draeger, president, and CEO of the National Association of Student Financial Aid Administrators (NASFAA), told The Hill on Thursday.

But others also say more must be done to aid borrowers in a student loan system that data has shown places a disproportionate burden on people of color. While the Federal Reserve estimated earlier this year that more than $1.7 trillion in student loan debt had been racked up by tens of millions of borrowers nationwide, research has shone a light on racial disparities that persist within those numbers.

A 2016 report released by The Brookings Institution found that Black students owed an average of $7,400 more than their white counterparts after graduation, and said that gap “more than triples to a whopping $25,000” over four years. The report also found that 7.6 percent of Black college graduates were more likely to default on their debt in the four years after graduating, compared to 2.4 percent of white college graduates. 

And, while the report said Hispanic borrowers, at the time, shared similar levels of debt to white graduates, it found they also were “more than twice as likely to default” than their white peers.

“That’s a very similar population to people who’ve been most financially impacted by COVID,” Winston Berkman-Breen, deputy director of advocacy and policy counsel at the Student Borrower Protection Center, told The Hill. 

“Not only is continuing the pause continuing a racial justice initiative, canceling student loan debt is a way to sort of reset some of the racial injustices that have happened in terms of how different communities bear the burden of student loan debt in this country,” he added.

As the White House presses on with plans to resume student loan payments on Feb. 1, Sen. Raphael Warnock (D-Ga.) led a group of senators in sending a letter this month calling on the administration to waive interest on federal student loans, which has also been halted through the pandemic public health emergency. Not all progressives are on board with the effort, with some continuing the push for the overall pause on loan payments to be continued amid the pandemic, or wiped out completely.

“No. We need cancellation,” Omar said recently when asked if the push went far enough.

But senators said they want to get as much relief for borrowers as possible, with roughly half a month to go until federal student loan payments are scheduled to resume.

“I’m for the most extensive relief we can get for students. I mean, I think this is really bad for the economy,” said Sen. Ron Wyden (D-Ore.), who also signed onto the letter spearheaded by Warnock.

The White House did not immediately respond to questions about whether it supported the senators’ proposal.  Psaki said the White House will release more details about its plans in the weeks ahead and “engage directly with student loan borrowers to ensure that they have the resources they need and are in the appropriate repayment plan.”

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