White House Moving toward Canceling $10K in Student Debt for Certain Borrowers
The White House is moving toward canceling up to $10,000 in student debt for borrowers who are under a roughly middle-tier income bracket.
The plan would forgive this amount in loans for students who earn less than $125,000 a year, multiple sources familiar with the discussions told CNN. The decision to offer the relief could be announced as early as Wednesday, potentially subject to last-minute adjustments.
The Biden administration will probably make an announcement this week about whether the government will extend the moratorium on student-debt repayments, currently suspended until August 31. Some economists, such as former Treasury secretary Larry Summers have warned against prolonging the pause, which he argued could exacerbate inflation.
Borrowers have not been required to send payments for most federal student loans since March 2020, when President Trump implemented the break to help graduates and young professionals struggling to navigate the economic downturn wrought by the Covid lockdowns and closures.
Critics of student-loan forgiveness allege that it enriches the wealthy at the expense of lower-income Americans by upping the overall tax burden regardless of whether the individual taxpayer attended college. Others claim that the executive branch is not authorized to forgive any amount of student debt for debt-holders of any income group, our Charles C. W. Cooke noted. In 2021, the Department of Education determined that the executive branch “does not have the statutory authority to cancel, compromise, discharge, or forgive, on a blanket or mass basis, principal balances of student loans, and/or to materially modify the repayment amounts or terms thereof.” Opponents also say that, besides being unconstitutional, such a policy subsidizes degrees held by the politically powerful or already affluent.
The possible White House proposal, floated a few months ago, seems to exclude very high earners from the benefits.
Education Secretary Miguel Cardona said on NBC’s Meet the Press Sunday that the public should anticipate an update from the administration on student loans in the “next week or so.”
“We’ve been talking daily about this, and I can tell you the American people will hear within the next week or so from the president and the Department of Education on what we’re going to be doing around that,” he said.
A number of Democratic lawmakers have urged Biden to enact sweeping student-loan forgiveness, but Republicans have fiercely resisted it, claiming illegality and fiscal irresponsibility, given the ongoing inflation crisis.
