Just how serious is President Biden about student loan debt? He says he's thinking about forgiving a chunk of what borrowers have taken on to get an education, but not to the tune of $50,000 per borrower like some of his fellow Democrats have been urging him to do.
"I am considering dealing with some debt reduction," Biden said on Thursday in response to a question raised at a White House briefing. "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."
The president didn’t leave it at that, though. He said he would have a complete answer to that question sometime in the "next couple of weeks."
So, where did the $50,000 forgiveness figure come from? Hoping to help grease the possibilities for Democrats in the upcoming midterm elections, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) belabored the point, asking the president to up the ante and cancel $50,000 in student loan debt.
Finding a solution that works for everyone
There’s a fine line between being proactive and being overly generous, and Biden is trying to find it with the student loan issue. During his run for the Oval Office, he vowed that he would erase $10,000 in student loan debt and challenged Congress to take action.
Once he got into the White House, advisors stepped in and cautioned that the president could face legal challenges if he spread the student debt cancellation too far. Biden asked his team to give him the best options, and the answer he promised soon should tell us where the sweet spot is in that regard.
Biden has to be careful not to set any expectations for future student loan borrowers, suggests Michael Heberling at the American Institute for Economic Research. "Will this really be just a 'one-time' gift? Doubtful!," he said.
"The students who follow in the years to come will borrow with the understanding that their $10,000 relief will be there as well. After all, it’s only fair. This situation highlights Planer’s Rule (Similar to Murphy’s Law): An exception granted becomes a right expected the next time it is requested."
How about another extension?
The nudge to move the student loan issue forward also came up at a closed door meeting with the Congressional Hispanic Caucus earlier in the week. Among the concerns presented at the meeting, Congressman Tony Cárdenas (D-CA) asked the President to address student loan debt.
Cárdenas said he asked Biden to extend the moratorium past its current Aug. 31 expiration date. “Well, Tony, I’ve extended it every time,” the president responded. Pushing Biden a little harder, Cárdenas then asked the president for another favor – issue an executive order to alleviate at least $10,000 in student loan debts per person.
Cárdenas emphasized that the situation is particularly burdensome with the Latino community. He told Biden that Latinos in the U.S. who are still trying to pay off student debt aren’t getting very far. Cárdenas said that despite their efforts, Latinos have more than 80% of their bill due after more than a dozen years.