President Biden will soon decide on “canceling” up to $10,000 in student loans for millions of borrowers as the Aug. 31 deadline nears, when loan payments are scheduled to begin again after a pause implemented to help young professionals cope with the pandemic-related economic downturn.
Internal White House discussions are considering extending the pandemic-related pause in addition to canceling $10,000 for millions of borrowers below a certain income threshold, according to The Washington Post.
The issue has divided Democratic lawmakers and policy experts influential with the administration, putting Biden in a spot in which he is guaranteed to antagonize some supporters. Advocates say the president should fulfill a campaign promise to alleviate the large debt burdens of millions of young Americans, and critics say that could exacerbate inflation while mostly benefiting high-income college graduates who do not need assistance. Administration officials must choose between canceling substantial debt — potentially giving Republicans a new talking point ahead of the midterm elections — and infuriating young voters and racial justice organizations whose support they also need at the polls.
Officials have studied for months whether canceling student loans could alienate voters who had already paid theirs off, and polling results have been mixed, said a third person familiar with the matter, who also spoke on the condition of anonymity to reflect private conversations. White House officials previously discussed limiting debt forgiveness to Americans who earned less than $150,000 in the previous year, or $300,000 for married couples filing jointly. One person familiar with the matter said those thresholds had not changed, although implementing those caps in practice could prove complicated.
White House aides scrambled to prepare a student debt forgiveness policy in May. Those plans were put on hold amid negotiations over Democrats’ economic agenda with Sen. Joe Manchin III (D-W.Va.), and the repeated postponements have exasperated supporters of cancellation. The measure is expected to apply only to undergraduate debt, and Democratic officials have discussed further restricting eligibility to attendees of state schools. (WaPo)
Critics say the plan bails out the wealthy at the expense of the working class, and will worsen inflation - a concern shared by nearly 60 percent of Americans, according to a new CNBC poll.