President Joe Biden continued his slow rollout of student debt transfers Friday morning with the announcement that his administration will write off $5 billion worth of loans for 74,000 borrowers.
The White House touted the move as the president using “every tool at our disposal” to cancel student debt, yet the trickle approach has outraged conservatives who say the actions are illegal, while “forgiveness” advocates are urging the administration to go bigger.
“President Biden continues to defy the Supreme Court and Congress by forgiving yet another round of student debt,” Job Creators Network Foundation President Elaine Parker said. “His lawless actions make a mockery of the separation of powers and set a dangerous precedent that consolidates more power in the executive branch.”
Parker said college students are the “biggest losers of the move,” as colleges have been given a “blank check” to continue overcharging with the push. Conservatives also like to point out that any unpaid loans fall on the backs of taxpayers.
But the other side isn’t satisfied, either. Biden initially tried to cancel up to $20,000 in loans for anyone making less than $125,000 a year or up to $40,000 for married couples earning up to $250,000. The total price tag exceeded $400 billion but never went through, as the Supreme Court ruled it illegal.
Instead, the relatively smaller amounts canceled affect 3.7 million borrowers, or less than 10% of the 40 million-plus people who hold student loans.
“The student loan issue was not something addressed by the White House in the end in a comprehensive way, according to many young voters,” CNN’s Audie Cornish told press secretary Karine Jean-Pierre earlier this month. “Are you going to try to finish those jobs in particular?”
Jean-Pierre, who had not mentioned student loans when asked about the White House’s 2024 priorities, responded by saying Biden “took steps” despite the obstacles.
“The president put forth a plan,” she said. “He wanted to keep his promise on dealing with the student loan debt that is really crushing families across the country, and he took steps even though the plan that he put forth was stopped, certainly, by folks in Congress.”
The latest round, like every round since the Supreme Court loss, was described as a fix to existing loan programs, often crediting late, partial, or deferred payments toward completion of them.
“From day one of my administration, I vowed to improve the student loan system so that a higher education provides Americans with opportunity and prosperity — not unmanageable burdens of student loan debt,” Biden said on Friday. “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”
Some borrowers may be waiting for more tools to emerge.
Loan payments did not have to be made during a pandemic-related pause that stretched well over three years before ending last fall.
A recent survey found that 60% of borrowers have missed payments since the pause ended, 25% still haven’t made any payments, and 9% are intentionally “boycotting” in hopes of pressuring the government to cancel more debt.
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Interest is accruing in the meantime, and missed payments will also affect credit scores. Biden’s critics thus accuse him of amplifying false hope, which will exacerbate the problem.
“Biden’s latest student loan debt vote-buying scheme comes just days after his Education Department failed its independent financial audit for the second year running,” said Bob Eitel, who helped craft regulations under the Betsy DeVos-led Department of Education. “These bailouts will only encourage more borrowers to renege on their loans, add fuel to the fire of tuition inflation, and punish hardworking Americans who either never went to college or repaid their loans.”