Student Debt Borrowers Caught In Crossfire Of Democratic In-Fighting
The Democratic Party’s in-fighting about student loan debt and forgiveness is leaving student loan debt borrowers in a kind of limbo.
Unless something is done, student loan repayments will resume in October. Since March 2020, student loan borrowers were able to enjoy zero interest accrual and no payments. This pause enabled people to keep their heads above water during the COVID-19 pandemic. However, with the possibility of payments resuming, increasing interest rates and the surge in the Delta covid-19 variant, it could be a terrible thing for borrowers.
There is hope that borrowers will see their debt erased, if not all of it; some of it. There is no timetable for when this will be done, even though President Joe Biden had championed $10,000 of debt erasure when he was running for president.
Since Biden became president, cancellation has not been added to the stimulus plan, infrastructure plan or budget. He’s also been hesitant in moving forward with a $50,000 student loan cancellation that many Democratic lawmakers have suggested he do with executive powers.
According to Biden, Congress is the one responsible for canceling student debt, but Dem. Sens. Chuck Schumer and Elizabeth Warren disagree, saying the executive powers give him the ability to cancel the debt. Due to this discrepancy, it’s caused a division among the party, generating confusion and frustration with the borrowers.
Biden did ask the Justice and Education Departments to look into what legal authority he had to cancel $50,000 in debt per borrower with an executive order. Despite this, he rejected Schumer’s and Warren’s plan of clearing $50,000 in student debt.
Biden also said it could be argued a president could use the executive powers to wipe student debt out, but he’s not likely to go that route. At a town hall hosted by CNN, he said he would not do this. He’s adamant that $10,000 of student debt erasure is enough, and feels the loan forgiveness needs to be dependent on where a borrower attended – public or private college.
The White House has, for the first half of the year, been looking into the legalities of canceling the debt.
However, House Speaker Nancy Pelosi agreed with Biden that the president has no power to wipe out student loan debt, as it was a policy discussion and Congress had to agree to it. She said a U.S. president does not have the power to do debt forgiveness. Pelosi said a postponement is doable but not complete forgiveness.
Schumer and Warren do not agree with either Biden or Pelosi, saying the Higher Education Act gives him the power to cancel student debt. Both senators said canceling student debt would help boost the economy and close the racial wealth gap.
Schumer said the president’s flick of a pen to cancel $50,000 in student debt would help boost the economy. Warren agrees with Schumer’s assessment, saying a letter from Harvard Law School’s Legal Services Center details the legal ability of the Education Secretary.
Warren said student debt was like a sword over a person’s head, and the sword gets closer every day. She said the U.S. president could eliminate the sword and ease borrowers’ pain.
This in-party split means it’ll be some time before any real debt relief is seen… if ever.
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