Well into the second year of his presidency, Joe Biden’s administration might be getting ready to forgive or cancel some student loan debt, which would fulfill a campaign promise.
When asked about the topic Monday, White House press secretary Jen Psaki said a decision would likely be made before the pandemic-induced pause on repaying those loans ends in August.
“I don’t have anything to preview for you in terms of any authority and how — or how it would work,” Psaki said. “What I would tell you is that not a single person in this country has paid a dime on student federal student loans since the president took office. And what we have said is that he would make a decision about any cancellation of student debt before the conclusion of that pause on student loans, but I don’t have anything to preview for you at this point in time.”
According to Investopedia, about a third of American college students go into debt to attend school, and the average student is carrying a record-high debt of $40,904 in 2021, totaling $1.75 trillion for the nation.
During the 2020 campaign, Biden posted on the social media platform Twitter that “a minimum” of $10,000 per student should be forgiven.
“Additionally, we should forgive a minimum of $10,000/person of federal student loans, as proposed by Sen. (Elizabeth) Warren and colleagues,” Biden’s March 2020 tweet said. “Young people and other student debt holders bore the brunt of the last crisis. It shouldn't happen again.”
The administration, however, has moved away from taking such an action through the executive branch, citing authority concerns.
During a February 2021 town hall, CNBC reported that Biden told a member of the audience that he was not prepared to forgive up to $50,000 per student with an executive order as Senate Majority Leader Chuck Schumer, D-N.Y., said he should do within his first 100 days in office.
“I will not make that happen,” Biden said to the audience member.
Student loan repayment for federally backed debt has been paused six times throughout the COVID-19 pandemic, and is set to resume after Aug. 31.
The pause in payments and accruing interest was expected to help some 41 million borrowers save about $5 billion per month during the pandemic crisis, according to an article published this month by the Federal Reserve Bank of New York.
A survey cited in the report estimates that student debt holders report a 13.5% chance they will not be able to pay a minimum debt amount, compared to 8.7% of those not holding student debt.
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