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President Biden forgives $10,000 in student debt for low-income borrowers

On Aug. 24, college students and graduates alike received wonderful news. President Biden announced his administration’s plan to eliminate “significant amounts of student loan debt for tens of millions of Americans,” and announced that his administration “is extending the current moratorium on [student loan] payments until Dec. 31.”

 

It was mentioned that the plan will “cancel $10,000 in debt for those earning less than $125,000 per year and $20,000 for those who had received Pell grants.” A Biden administration official estimated that “roughly 43 million federal student loan borrowers are eligible for forgiveness, and about 20 million could have their debt completely wiped out.”

 

This is fantastic: 43 million lives improved with the stroke of a pen, 20 million people who are no longer laboring to pay off astronomically high student loans, 20 million people whose income belongs to them once again.

 

This plan has been called “Biden’s bailout for the wealthy” by the RNC. I don’t have the time nor the crayons to explain to them why that’s wrong, but I do have a few valid pieces of criticism for Biden’s student loan forgiveness plan.

 

Why not more forgiveness?

 

First and foremost, Biden’s decision to negate just $10,000 of student debt breaks one of the key proposals he made before taking office. Biden proposed forgiveness for “all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000.”

 

Biden also proposed that “the federal government would pay the monthly payment in lieu of the borrower until the forgivable portion of the loan was paid off. This benefit would also apply to individuals holding federal student loans for tuition from private HBCUs and MSIs” (Historically Black Colleges and Universities and other Minority Serving Institutions) while he was on the campaign trail.

 

Although seeing $10,000 of debt wiped out for millions of people is wonderful, I’m disappointed that more debt wasn’t forgiven. If Biden has the legal authority that he’s claiming to have, then canceling more debt shouldn’t be a problem. The decision to take a radical action by forgiving debt, but only forgiving a moderate amount of that debt, puzzles me. I am disappointed by this decision, yet still grateful that any debt is being forgiven.

 

What about the legal challenges?

 

There’s one more significant hurdle that this edict must pass: a legal challenge. The White House “relied on the 2003 HEROES Act enacted following the Sept. 11 terror attacks to underpin its plan,” citing the fact that the law gives the “Education Department the authority to both suspend loan repayments through Dec. 31 and cancel loan debt for many borrowers” in the case of an emergency.

 

The HEROES Act gives the Department of Education the power to affect student loan debt specifically for those who have “suffered direct economic hardship as a direct result of a war or other military operation or national emergency.” The Biden administration seems to be relying on the Supreme Court to interpret COVID as an ongoing national emergency in order to fit this definition. The problem with that logic is that this conservative-majority Supreme Court has a marked propensity of being anti-Biden.

 

One Boston University (BU) Professor who has written extensively on executive powers mentioned that “The problem with the HEROES Act of 2003 is it is clearly about 9/11 context. Even if it says emergencies might be broader than 9/11, the Roberts [Supreme] court will see COVID as a stretch.” Based on this logic, the Supreme Court will unfortunately likely agree with Nancy Pelosi’s sentiment, and shoot down the loan forgiveness.

 

In Conclusion

 

I am extremely happy that President Biden announced this debt forgiveness. It will help lower-income borrowers immensely, and the significance of this executive order is not to be understated. But, Biden, the lower-than-proposed amount of debt forgiveness and bad seed sown for legal challenges make this an imperfect, but still momentous, announcement.



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