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President Joe Biden is exploring the presidential power to cancel student loans – but has yet to decide how best to deal with the financial burden of student borrowers. White House Chief of Staff Ron Klain said Thursday the president had asked his Education Secretary Miguel Cardona to prepare a note on the president’s legal power to write off student debt.
Biden had previously suggested he did not have the authority to write off $ 50,000 in student loan debt, saying he “wouldn’t do that” at a town hall in February, as some members have demanded of his party and of the progressives. Instead, he has indicated he wants to cancel up to $ 10,000 and would prefer to work with Congress, but Klain’s comments Thursday in an interview with Politico left the door open.
“He hasn’t made a decision on this anyway,” White House Chief of Staff Ron Klain said in response to a question about the decision. Klain noted that Biden has yet to receive the memo to make the decision.
“Hopefully we’ll see that in the next few weeks, and then he’ll look into that legal authority.” Klain said.
Student loan debt has exceeded more than $ 1.7 trillion, according to the Federal Reserve. More than 42 million Americans – about 1 in 8 – have student loans, according to the Department of Education. It is now the second largest amount of household debt in the United States behind mortgages.
On Thursday, Democratic Senator Elizabeth Warren of Massachusetts – who along with Senate Majority Leader Chuck Schumer and others unveiled a resolution in February to write off $ 50,000 in debt – continued to pressure Biden to put an end to the “nightmare”.
“The cancellation of $ 50,000 in student debt is a matter of racial justice. It is a question of economic justice. It’s a question of generational justice, ”she said at a press conference. She will be holding a hearing on student debt later this month.
A report released last month by the JP Morgan Chase Institute found that canceling $ 50,000 in student loan debt with certain income limits would reduce student loan debt by $ 786 billion. He also found that canceling $ 50,000 in student debt offers greater total forgiveness for low-income borrowers, black and Latinx borrowers, and those facing a debt trap or long-term repayment. compared to other smaller or more focused options.
Unions demand action on forgiveness of public service loans
The Biden administration is also facing pressure from unions on the student debt front. On Thursday, a letter from 15 unions representing civil service workers in Cardona urged him to take immediate action to write off the student loan debt of all public sector workers who have completed a decade or more of service.
The unions – which represent more than 10 million public service workers, including teachers and police officers – are specifically asking Cardona to launch a 90-day review of the public service loan forgiveness program, then to reverse this debt.
The letter says that since civil service workers first became eligible for debt cancellation under the program in 2017, 98% of those who applied have been turned down. They blame a combination of factors including tight regulations, mismanagement by the previous administration, and “widespread abuse” by the student loan industry.
“This effort is the bare minimum necessary to do justice to public service workers who have fallen through the cracks of our badly damaged student loan system,” the unions said.
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