“We will wait for the conclusion before making a final decision,” Psaki said.
The timeline presented is the latest indication of the inconvenience the Biden White House has with calls to work quickly and aggressively with the forgiveness of student debt. At a CNN City Hall Tuesday night, Biden ruled out canceling $ 50,000 in federal student loan debt per borrower and said he was more comfortable forgiving $ 10,000 in debt.
“I will not let that happen,” Biden emphatically told an audience member in Wisconsin who asked him to wipe out $ 50,000 per person student loan debt, a proposal that had been pending for months by Senate Majority Leader Chuck Schumer. senator Elizabeth Warren (D-Mass.) and a slew of other progressive lawmakers.
“I am prepared to write off a debt of $ 10,000, but not $ 50,” Biden told the audience, responding directly to this for the first time as president. “Because I do not have the power to do so by signing the pen.”
White House officials said Wednesday that Biden’s reference to the write-off of $ 10,000 loan forgiveness was not intended to describe executive action, but to reflect his endorsement of the goal achieved by legislation, which he did not suggest.
Such a plan is likely to face a difficult path in Congress, where even moderate Democrats and nearly all Republicans are opposed to the pardon of student loans.
Some Democrats also said that billions of dollars spent on wide-ranging forgiveness for loans could be better spent elsewhere, or at least targeted at most needy student borrowers.
“Even modest proposals for forgiveness for student loans are incredibly expensive and use federal spending that could further other goals,” Adam Looney, an Obama administration treasury official and now a senior fellow at the Brookings Institution, said last week. writing. “The amounts involved in the loan waiver proposals will exceed the cumulative spending on many of the major anti-poverty programs in recent decades.”
Biden’s comments in CNN City Hall on Wednesday sparked the anger of progressive and elected Democrats.
“It’s time to act,” Schumer and Warren said in a joint statement, reiterating that they believe the government has a wide authority to provide much-needed relief to millions of Americans immediately. ‘
Adam Green, co-founder of the Progressive Change Campaign Committee, said Biden’s rejection of the $ 50,000 figure and the possible negligence of forgiveness of loans by executive action seemed ‘unnecessary’ and that it would hurt his level of grassroots activists. impair.
“It throws cold water on activists’ enthusiasm for no reason,” Greene said, calling it a “distraction” for other parts of his agenda, such as Covid relief, where progressives were largely satisfied with his approach.
Rep. Alexandria Ocasio-Cortez (DN.Y.) also rebuffed Biden City Hall’s response about student debt, say in a tweet that the “case against forgiveness for student loans seems more shocking by the day.”
“We have the * Senate majority leader * on board to forgive $ 50,000,” said Ocasio-Cortez, who is a potential primary threat to Schumer in his re-election bid next year. ‘Biden holds back, but many of the arguments against it do not hold water on closer inspection. We can and must do it. Keep up the pressure! ”
Proponents of the debt cancellation have increasingly called the debate a racial justice, noting the excessive burden of indebted borrowers to carry student loan debt.
Color of Change, a racial group, this week released a poll showing that two-thirds of black voters ‘strongly support’ the cancellation of student loan debt. The survey found that 40 percent of black voters would not vote for a candidate who is against the cancellation of student loan debt.
Arisha Hatch, the group’s vice president and head of campaigns, called Biden’s comments on student debt “disappointing” on Tuesday night.
“It is definitely out of step with the black voters who not only elected him but also gave the majority to Democrats,” she said. “It will take more pressure for him to understand how important it is for black voters and many other progressive voters.”
Alexis Goldstein, senior policy analyst at Americans for Financial Reform, which has organized hundreds of civil rights, labor and progressive groups in favor of debt cancellation, said she was optimistic about the Biden administration’s review of the issue.
“We remain confident that this is something the president can do through executive action,” she said, adding that the $ 10,000 level should be a starting point and not a ceiling. “We will continue to push for the president for a number that better reflects the crisis and better addresses racial issues.”
About 45 million Americans owe about $ 1.6 billion in federal student loans. The cancellation of $ 10,000 in student loan debt will completely eliminate the debt of more than 15 million borrowers whose current balance is less than or equal to the amount, according to the most recent federal data as of September 30th.
Another 23 million borrowers owe balances between $ 10,000 and $ 60,000; and more than 7 million borrowers have a federal debt of $ 60,000 or higher.
Among the college students who borrow money to study at the university, the average student graduates on average nearly $ 29,000, according to the most recent analysis by the Institute for College Access & Success.
The forthcoming legal review by DOJ announced by the White House comes amid a much-debated debate over whether the education department itself has the power to cancel large parts of its outstanding student debt portfolio.
Proponents of student debt relief say long-standing provisions of the Higher Education Act give the education secretary broad power to wipe out loans. They also argue that a separate 2003 law gives the Department of Education more discretion over student loans during declared emergencies.
But the Trump administration issued a legal opinion during his declining tenure, concluding that the department does not have the authority to wipe out large amounts of debt without congressional approval. This memorandum, written by a political nominee from Trump, is not binding on the agency and could be overturned by the Biden government. A Department of Education spokesman on Wednesday declined to say whether the Trump administration’s memo would remain in effect at the agency or whether it would be revoked.