President Joe Biden’s long-awaited plan to forgive student debt, announced Wednesday, met with immediate opposition from some lawmakers and consumer groups, though they praised the historic measure.
The White House said it would forgive most borrowers $10,000 in federal student debt and up to $20,000 for recipients of Pell Grants, which are available to students based on financial needs. The plan could eliminate credit balances from at least 9 million borrowers, according to higher education expert Mark Kantrowitz.
Biden ‘should have and should have done a lot more’
Astra Taylor, co-founder of the Debt Collective, called Wednesday’s announcement “bittersweet”.
“On one hand, this is a milestone for our movement,” she said in a statement. “Even so, President Biden should and could have done much more than cancel $10,000 or [$]20,000 – and he could have made the relief automatic instead of putting up unnecessary hurdles.
Biden is canceling $10,000 of federal student loan debt for most borrowers
Nearly 8 million borrowers may be eligible for automatic relief; However, some borrowers may need to apply if the U.S. Department of Education does not have relevant income data, according to the federal student aid website. This application is not yet available.
“We intend to keep fighting until all student debt is forgiven and the college is free,” Taylor said. “If President Biden can cancel that much debt, he can cancel them all.”
Biden combined debt relief and the payment pause with a measure to limit student loan repayments to 5% of monthly income.
Warren, Schumer pledge to ‘pursue every available avenue’
Senate Majority Leader Chuck Schumer, DN.Y., and Senator Elizabeth Warren, D-Mass., hailed Wednesday’s policy announcement as “the most effective single action the President himself can take to help working families and the economy.” . “
The duo had been pushing the White House to forgive up to $50,000 in federal student debt – and they were alluding to an ongoing fight for more relief.
“Make no mistake, the work — our work — continues as we pursue every available avenue to address the student debt crisis, help close the racial wealth gap for borrowers, and help our economy grow,” said Schumer and warren
Canceling $10,000 is of little use
NAACP President and CEO Derrick Johnson complained that Biden failed to call in loans of $50,000 or more per borrower. He called student debt relief a “racial and economic justice issue” that could help close the racial wealth gap that often pushes black students to borrow more than other students.
“Just $10,000 debt relief is like throwing a bucket of ice water on a wildfire,” Johnson wrote in a comment. “It’s hardly doing anything – just a dent in the problem.”
Data suggests that doubling the maximum forgiveness amount — to $20,000 — for Pell Grant recipients will benefit black student borrowers the most. As of that date, 72% of black students received state Pell scholarships in the 2015-16 school year, about twice as many Asian and white students that year, according to the latest data from the National Center for Education Statistics.
Carlos Moreno, a senior campaign strategist with the American Civil Liberties Union, welcomed the policy’s impact on black borrowers.
“Student debt relief will help ensure financial stability and mobility for people of color — particularly black Americans — who are disproportionately burdened with student debt, while providing immediate financial relief and peace of mind to millions of Americans,” Moreno said.
We intend to keep fighting until all student debt is canceled and college is free.
Co-founder of Debt Collective
Forgiveness could ‘make inflation worse’
While some raised concerns that the Biden administration had not gone far enough, others said White House actions went too far and threatened to exacerbate stubbornly high inflation.
“Washington Democrats have found another way to make inflation worse … and get nothing for millions of struggling working American families,” said Senate Minority Leader Mitch McConnell, R-Ky.
But Adam Green, co-founder of the Progressive Change Campaign Committee, called the move “a major investment [in dollar terms] than the GI bill – in young people and millions of others.”
“Today, canceling up to $20,000 in student debt for up to 43 million Americans will have historic implications for Americans who have faced a unique generational burden,” Green said.