Joe Biden pressed to cancel more student loan debt

Democratic lawmakers and their allies on the left aren’t nearly satisfied with President Biden’s moves to forgive Americans’ mountain of student debt, even though the administration has wiped away $1 billion from tens of thousands who had been scammed by for-profit colleges.

Debt relief advocates are pressing the administration to cancel another $1 trillion with a sweeping move to eliminate up to $50,000 worth of debt for each of the 43 million Americans saddled with student loans. They also want Mr. Biden to bypass Congress and erase the debt with the stroke of his pen.

It is a matter of racial and economic justice, they say, because the broken system has forced millions, including a disproportionate share of Black Americans, to go deeply into debt for college education.

So far, Mr. Biden has disappointed them.

More than 300 liberal groups wrote Mr. Biden in the days leading up to his inauguration to urge him to at least make good on his campaign promise to knock $10,000 off all borrowers’ debt. This smaller debt rollback would cost taxpayers $373 billion over the next decade, according to an analysis by Adam Looney, an economist at the liberal-leaning Brookings Institution.

The cost of forgiving $50,000 of student debt is as much as the government spent on the Supplemental Security Income program for the elderly and disabled, or on all housing assistance programs since 2000, Mr. Looney noted in the study.

The pressure is coming from the highest ranks of the Democratic Party.

Senate Majority Leader Charles E. Schumer of New York joined liberal icon Sen. Elizabeth Warren of Massachusetts in demanding the $50,000 write-off.

“Student loan debt is crushing millions of Americans,” Ms. Warren said recently. “President Biden has an opportunity to fix that with a stroke of a pen.”

Thus far, advocates for canceling student debt have refrained from publicly attacking Mr. Biden. They take some heart in the president’s request for the Justice Department to examine whether he can unilaterally wipe away $1 trillion owed to the federal government. Some who have been pushing for debt cancellation say privately that their patience is starting to wear thin.

Mr. Biden has balked at the idea of canceling $50,000 of all debt because it would let top earners off the hook, including doctors and lawyers from elite universities.

“I will not make that happen,” he said during a CNN town hall. “It depends on the idea that I say to a community, ‘I’m going to forgive the debt — tens of thousands of dollars of debt — for people who have gone to Harvard and Yale and Penn.’”

The idea is even more unpopular among Republicans. Sen. Richard Burr of North Carolina, the top Republican on the Senate Health, Education, Labor and Pensions Committee, has called student debt cancellation “dangerous and foolhardy.”

The Biden administration did take a small step toward canceling the nation’s roughly $1.7 trillion in student debt two weeks ago. It expanded Trump-era partial debt forgiveness for for-profit college scams to total debt forgiveness.

The colleges in some cases misrepresented the value of the schools to find good jobs or used ads that falsely claimed relationships with major companies.

The previous administration’s debt forgiveness didn’t do enough for those borrowers, many of them veterans, who ended up deep in debt without a degree and without the promised high-paying job, a senior education department official said. Expanding the forgiveness will cost about $1 billion, the officials said.

“This is long overdue to make it right by those people,” said Kyle Southern, higher education policy and advocacy director for Young Invincibles, a liberal advocacy group that is pushing for the $50,000 debt cancellation. “But it’s barely a drop in the bucket when the scale of student debt is more than $1 trillion.”

A central point for those pushing for canceling debt is that students should not have had to borrow so much for college in the first place. Many are struggling to pay back the loans, which are holding them back from buying homes and fulfilling other ambitions.

Higher education costs soared when states slashed funding for colleges and universities after the Great Recession.

Community colleges and public universities received $7 billion less in state funding in 2018 than they did a decade earlier, according to a study by the Center on Budget and Policy Priorities, a liberal Washington think tank.

In the past 30 years, the cost of going to public four-year colleges and universities doubled in terms of tuition and fees. The average cost jumped from $18,550 in 1990 to $37,650 last year, according to the College Board. Over that time, the median family income in the U.S. grew by only 25%.

As a result, much of the cost of higher education shifted from states to students who borrow money. According to the Federal Reserve, the amount of student debt Americans owed doubled from $845 billion in 2010 to $1.7 trillion last year.

“There’s been a full generation of policy failure to invest, while the labor market increasingly demands [college] credentials,” Mr. Southern said. “One of the most progressive things we can do is acknowledge the systemic failure that has financed higher education through student debt.”

Proponents also see racial justice implications. They argue that Black students are less likely than their White peers to have family who can afford to pay at least part of college costs. As a result, studies show, a greater percentage of Blacks than Whites have had to borrow to go to college.

Prospects for the debt forgiveness that advocates want are uncertain in the evenly split Senate and even the Democratic-majority House.

House Democrats in September considered canceling $10,000 in debt as part of their $2.2 trillion proposal for COVID-19 relief. The provision was dropped the night before the House passed the American Rescue Plan, apparently because of concerns from moderate Democrats.

The groups now want Mr. Biden to go it alone.

What bothers others, including Mr. Biden, is the idea of canceling $50,000 in student debt for everyone, regardless of how much money they are making.

Alexander Holt, a policy analyst at the Committee for a Responsible Federal Budget, agreed that there is a problem. “The student loan repayment system isn’t working. There are too many struggling borrowers who are falling into delinquency or default,” he said.

But canceling the debt of Harvard-educated lawyers goes too far, he said.

“This will end up helping people who are doing just fine,” he said. He also noted that people without college degrees have been more likely to lose their jobs during the pandemic.

Richard Hess, director of education policy at the conservative American Enterprise Institute, was even more direct.

“It’s nuts,” he said. “The idea of taxpayers who chose not to go to college paying for someone who chose to go to Oberlin or the University of California law school seems like a non sequitur.”