Decision Time? Biden Is Close to Forgiving $10,000 in Student Loan Debt

Decision Time? Biden Is Close to Forgiving $10,000 in Student Loan Debt

The move is being weighed due to the forthcoming midterm elections later this year.

A new Bloomberg report is suggesting that President Joe Biden is considering forgiving a minimum of $10,000 in student loan debt per borrower via executive action.

According to people familiar with the matter, the news outlet added that one reason behind such a move is that the White House is seeking ways to bolster voter enthusiasm ahead of the November midterms.

However, “(that) would come with considerable risks,” it continued. “Some deficit hawks worry it could worsen the inflation that is already weighing heavily on Democrats’ chances of maintaining control of the House and Senate. But any move may not go far enough to appease progressives and other advocates.”

Late last week, despite ongoing pressure from Sens. Chuck Schumer (D-NY) and Elizabeth Warren (D-MA), Biden reiterated his opposition to wiping out approximately $50,000 in student debt per borrower.

“I am considering dealing with some (student) debt reduction,” he said Thursday at the White House. “I am not considering $50,000 debt reduction. But I’m in the process of taking a hard look at whether or not there will be additional debt forgiveness.”

Biden continued by saying that he will “have an answer on that in the next couple of weeks.”

Currently, more than 43 million borrowers hold $1.75 trillion in federal student loan debt, according to the Department of Education. Moreover, roughly a quarter of student loan borrowers—or 10 million individuals—are estimated to be in delinquency or default.

Since taking office, the Biden administration has so far canceled more than $17 billion in student loan debt for roughly 725,000 borrowers.

Biden’s statements came on the heels of a meeting with members of the Congressional Hispanic Caucus (CHC)—and he appeared to be keen on canceling some debt for college students regardless of whether they attended a public or private institution.

Rep. Tony Cardenas (D-CA), who attended the meeting, acknowledged that Biden never mentioned a specific amount he was seeking to cancel. When the lawmaker reiterated that the CHC supports the canceling of $10,000 in student loan debt, the president responded, “You're going to like what I do.”

Meanwhile, a group of Republican senators has introduced the Stop Reckless Student Loans Action Act, a legislation that would end the Biden administration’s pause on student loan payments and prohibit it from broadly canceling any student loan debt going forward.

Sen. Mike Braun (R-IN) pointed out in a statement that “the majority of Americans do not have college degrees.” Therefore, “why should they be forced to pick up the tab for college degrees in the name of pandemic relief? This transfer of wealth is not a move to ‘advance equity,’ but rather a taxpayer handout to appease far-left activists,” he concluded.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.