Thursday, March 23, 2023

Biden’s first 100 days: student loan debt isn’t going anywhere

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As students across the country pivot between online and in-person classrooms, rethinking and navigating what the higher education landscape looks like under the weight of a pandemic that has killed more than 320,000 Americans and infected 18 millions more, a tradition remains: high tuition fees. and steadily increasing student loan debt.

This year, the United States broke records, for the first time exceeding $ 1.7 trillion in student debt, a 4% increase year-over-year. Over the past decade, student debt has grown by around 102%, according to Federal Reserve data.

The previous COVID-19 stimulus bill temporarily put an interest-free payment break for federal student loan borrowers, but the extension program passed Monday night does not offer such relief, which means that Starting next month, more than 43 million U.S. borrowers will have to start paying off their loans, this time with 10 million fewer jobs than before the pandemic began in earnest in March. Before the financial constraints induced by COVID-19, only three in ten young college graduates with student loans (32%) say they are living comfortably. This is compared to 51% of college graduates of the same age with no outstanding loans.

But Democratic lawmakers and advocacy organizations see a way out thanks to President-elect Joe Biden. More than 200 organizations, including the American Federation of Teachers and the NAACP, have signed a open letter to Biden last month, asking him to take action on his first day in office to use his executive power to write off any student debt. Progressive lawmakers have asked him to relieve $ 50,000 in debt per borrower on day one.

Biden himself launched a more conservative plan; during his campaign he said he would like to see $ 10,000 in federal student debt per borrower canceled by action of the legislative power. Student borrowers are in “real trouble,” Biden told reporters in November. “They have to make choices between paying their student loans and paying their rent, those kinds of decisions. But if Republicans continue to occupy the Senate, Democrats are unlikely to pass legislation, leaving students where they were.

The Department of Education has been the country’s largest lender and consumer bank for the past 10 years; he currently holds nearly $ 1.5 trillion in student loans. Democratic lawmakers say if some of this debt were forgiven, it would boost home buying and spending and could also help put money back in the pockets of those facing the repercussions of the COVID economy. -19.

There is also uncertainty over whether Biden could actually pass debt relief through an Executive Order (EO). If he did, he would certainly face legal challenges. Some argue it has the power to do so under the Higher Education Act 1965, which created the current federal student loan program. The law allows Biden’s education secretary to “compromise, waive or release” any loan. Some jurists claim that this means the president can issue an OE, while others claim that it does not.

In a recent live chat on Instagram, progressive MP Alexandria Ocasio-Cortez said that canceling student debt was “not a pipe dream at all” and that “most importantly … it can be done by executive order, which means Biden wouldn’t need Mitch McConnell. or the Republican Senate to cancel people’s student loans. The key is that we have to push it.

Still, it looks like Biden isn’t likely to embark on legally challenged legislation during his first day in office, and will likely leave it up to Congress to fight student loan debt cancellation over the course of of its first 100 days.

More political cover of Fortune:


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