Biden signals he’s open to canceling student loans

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President Biden gave his strongest intention yet in a private meeting with House Democrats that he is poised to take significant action to relieve student loans, a move that could include canceling tens of thousands of dollars in debt for some people.

Borrowers are currently benefiting from a moratorium on paying off their student loans that lasts until Aug. 31, a pandemic-induced pause that began under the Trump administration. The White House has come under considerable pressure from the liberal wing of the Democratic Party to cancel the liabilities outright, rather than repeatedly extending the moratorium as it has been doing.

Biden and centrist Democrats have expressed skepticism, however, about the wisdom of burdening taxpayers with the debt of students who voluntarily took out loans to attend pricey private universities. To address such concerns, Biden’s move could target lower- and middle-income borrowers.

During a lengthy meeting with members of the Congressional Hispanic Caucus on Monday, Biden signaled multiple times that he was prepared to not only extend the current moratorium but potentially to take executive actions canceling some of the debt altogether, according to two House members in attendance and two aids briefed on the meeting’s contents.

Rep. Tony Cardenas (D-Calif.) initially raised the issue with Biden during the meeting. In an interview, Cardenas said he first asked the president to extend the moratorium past its current Aug. 31 expiration date, and Biden responded with a smile, “Well, Tony, I’ve extended it every time.”

Cardenas said he then urged the president to issue an executive order to relieve at least $10,000 in student loan debts per person. In making his case, Cardenas said he told Biden that Latinos in the US who are carrying student debt still have more than 80 percent of their bill due after more than a dozen years.

Biden was “incredibly positive” about the idea, Cardenas said.

Another lawmaker in attendance, Rep. Darren Soto (D-Fla.), said Biden’s response to lawmakers’ requests to cancel at least some student debt was essentially that he would like to do it sooner rather than later. The president suggested he is looking to take the executive action in short order, telling the Hispanic lawmakers that they would be very happy with what he does next, according to aides briefed on the meeting.

Such a move could prove a popular selling point for Democrats in the upcoming midterm elections. Still, Biden stressed that the timing of any announcement on loan relief was sensitive, since he does not want it to add to inflationary pressures.

The president suggested to the lawmakers that he understood the burden of student loans on a personal level, since he recently finished paying off his late son Beau’s outstanding student debt. Biden often brought up that story on the campaign trail when discussing the subject with voters.

“I feel very confident that he is pushing on his team to do something, and to do something significant,” Cardenas said in an interview. “That’s my feeling.”

The issue forgiving student loans has long been politically fraught. Liberals argue that higher education should be relatively inexpensive for everyone, as it is in European countries. The soaring cost of the college, they argue, is a central barrier to social advancement in this country.

But many conservatives take issue with the notion that wealthier people who’ve decided to attend pricey schools should have their debts erased, while those who went to less-expensive schools or decided to forgo college altogether would get little or no benefit.

The debate is also unfolding at a time when some Americans, especially in rural areas and on the conservative end of the political spectrum, are questioning the value and desirability of a college education in the first place.

For much of his presidency, Biden has not been warm to the idea of ​​outright student debt cancellation. In an interview with New York Times columnist David Brooks last year, Biden reacted dismissively to the idea, saying, “The idea that you go to Penn and you’re paying a total of 70,000 bucks a year and the public should pay for that? I don’t agree.”

The president has also stressed that any debt relief plan would be focused on lower-income and underprivileged students.

During the presidential campaign, Biden wrote in a 2020 Medium post that he favored a plan “forgiving student debt for low-income and middle class people who have attended public colleges and universities” as well as historically Black Colleges and Universities, or HBCUs.

In that post, Biden spoke of “an immediate cancellation of a minimum of $10,000 of student debt per person,” adding that those earning less than $25,000 per year would not have to make monthly payments and would accrue no interest.

Amid a continual onslaught of pressure from Democrats, including Senate Majority Leader Charles E. Schumer (DN.Y.) and Sen. Elizabeth Warren (D-Mass.), the administration has never ruled out the idea of ​​a broader loan forgiveness program.

Schumer regularly tweets about the need to forgive student loans, tweeting messages like “It’s time for President Biden to #CancelStudentDebt for millions of Americans.”

White House officials have recently said that Biden would make a decision on student loan cancellations before Aug. 31, when the current moratorium on loan payments expires. “What I would tell you is that not a single person in this country has paid a dime on federal student loans since the president took office,” White House press secretary Jen Psaki said Monday.

However, around 7 million people with federal student loans are excluded from the pause because their private debt is held by companies. The Biden administration has already canceled more than $17 billion in student loans for 725,000 borrowers through targeted relief, including for people who are permanently disabled and those defrauded by their colleges.

The Hispanic caucus meeting Monday was part of a series of Democratic sit-downs Biden has held with various Democrat coalitions on Capitol Hill in recent weeks to discuss pushing ahead with his agenda by using executive action, since a number of his initiatives have foundered.

Several senior White House and other administration officials also attended the Hispanic Caucus meeting, including domestic policy chief Susan Rice, Office of Management and Budget Director Shalanda Young, political strategy and outreach director Emmy Ruiz, White House deputy Cabinet secretary Cristobal Alex, and Louisa Terrell , the director of administration affairs, according to an official administration.

Danielle Douglas-Gabriel contributed to this report.

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