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Biden’s student-debt pause invigorates the push for loan forgiveness

Activists, lawmakers call on president to act on campaign promise to cancel student debt

Activists call on President Biden to cancel student debt during a demonstration at the White House on Dec. 15 (Paul Morigi/Getty Images)

The Debt Collective, an offshoot of the Occupy Wall Street movement, was planning to rally outside the White House to demand President Biden fulfill a campaign promise: canceling some portion of student loan debt.

But after Biden last week extended the pause on federal student loan payments through May 1, activists gained a temporary victory — and reprieve. On Wednesday, as the omicron variant continued to drive coronavirus case surges, the Debt Collective canceled its D.C. protest planned for mid-January. Biden, the group claimed in a Facebook post, had “caved to our pressure.”

“Momentum is on our side,” said Thomas Gokey, co-founder of the Debt Collective. “Broad-based debt cancellation is the right next step, but it will take the same kind of public pressure to win.”

Biden administration extends federal student loan payment pause until May

While consumer groups and activists have applauded the payment pause’s extension, they remain focused on pushing for more. Biden repeatedly said canceling at least $10,000 in education debt would be part of his economic recovery plan after his election, but he didn’t include any such policy in this year’s sweeping rescue package or domestic spending bill, signaling to liberal groups that the issue was not a priority.

The Debt Collective announced Wednesday that it will replace its rally with a virtual strategy session on how to hold the president accountable. Cody Hounanian, executive director of the advocacy group Student Debt Crisis Center, said the payment pause’s extension will give borrowers more time to fight for cancellation.

“With last week’s extension, we feel the administration is beginning to better understand the challenges facing student-loan borrowers,” Hounanian said. Broad cancellation “must happen before millions of Americans are pushed back into a system that is clearly broken.”

Activists and some Democratic lawmakers have urged Biden to issue an executive order canceling federal student debt, with some calling for $50,000 per borrower and others pressing for full forgiveness. Proponents say reducing the burden of student loans would help stimulate the economy and close the racial wealth gap, as Black borrowers shoulder a disproportionate amount of debt.

In a recent survey of nearly 1,300 Black borrowers, conducted by Education Trust, two-thirds of respondents said they regretted taking out loans that now seem “unpayable.” Many felt the federal lending system exacerbated existing inequality and said the best remedy would be widespread loan forgiveness.

“We talked to Black borrowers in the middle of the pandemic who were able to save for the first time, think about planning a family … because they weren’t making payments,” said Jalil Mustaffa Bishop, an education professor at Villanova University who co-authored the report. “They were clear that cancellation is needed to end what many called a lifetime debt sentence.”

What borrowers would change about student loans

The Biden administration, however, has wavered this year between assurance that it is reviewing the president’s legal authority to forgive student loans and insistence that Congress should deliver a bill to bring the policy to fruition.

The congressional route would be difficult, as Republicans and moderate Democrats such as Sen. Joe Manchin III (W.Va.) oppose broad debt cancellation.

“We can’t truly build back better without freeing millions of the economic burdens of student debt, and thankfully with a stroke of a pen President Biden has the legal authority to do just that,” Rep. Ayanna Pressley (D-Mass.) said in early December, at an event held by the nonprofit Student Borrower Protection Center.

Pressley, Sen. Elizabeth Warren (D-Mass.) and Senate Majority Leader Charles E. Schumer (D-N.Y.) have pressed Biden to use the same legal authority to cancel debt that President Donald Trump’s administration used to temporarily waive interest on federal student loans early in the coronavirus pandemic.

Earlier this year, Biden directed the Education and Justice Departments to produce memos on his administrative power to forgive loans. In the fall, the New Yorker reported the existence of a heavily redacted Education Department memo that Gokey had obtained through a freedom of information request — confirming the administration has had such a memo since April.

People who spoke on the condition of anonymity because they were not authorized to discuss the matter publicly say the Justice Department has also produced a memo. Neither the Justice Department nor the Education Department would comment on the documents, nor would the White House confirm their existence.

There is no path to broad student debt cancellation that would be clear of challenges, both legal and political. Members of the administration are torn on the merits of debt cancellation, with some arguing there are more pressing matters at hand, according to staffers who spoke on the condition of anonymity because they were not authorized to speak publicly.

More colleges rethink student loans as debate over debt cancellation rages on

The president himself has shown a lack of enthusiasm for the policy. At a CNN town hall in February, Biden questioned whether it made sense to forgive “billions of dollars in debt for people who have gone to Harvard and Yale … rather than use that money to provide for early education for young children who come from disadvantaged circumstances?”

“My sense is that Biden doesn’t want to do it anyway, so it doesn’t matter if it’s legal or not,” said Beth Akers, a senior fellow at the conservative American Enterprise Institute and a former economic adviser to President George W. Bush. “If you go back to the campaign, he was not the first to put in place a loan-cancellation proposal, and his proposal was the most modest of the candidates. He needed to compete with the field.”

Akers noted that Biden has not put in place a team that has been “gung-ho” about debt cancellation, which she believes reflects his priorities. She said the lack of clarity on whether Biden will provide widespread forgiveness could complicate the resumption of student-loan payments as borrowers hold out hope for cancellation. In announcing the latest extension last week, Biden told borrowers to get ready for a return to the normal repayment process in May.

Still, Gokey of the Debt Collective said it would be political suicide for Democrats to resume repayment before midterm elections next year. Rep. Alexandria Ocasio-Cortez (D-N.Y.) said this month that her party is “delusional” to think it can hold on to power if it doesn’t act on student debt.

Asked about Ocasio-Cortez’s comments during a “Face the Nation” appearance, Vice President Harris said the Biden administration had not abandoned debt cancellation.

“We have to … figure out how we can creatively relieve the pressure that students are feeling because of their student loan debt,” Harris said.

The pandemic’s impact on education

The latest: Updated coronavirus booster shots are now available for children as young as 5. To date, more than 10.5 million children have lost one or both parents or caregivers during the coronavirus pandemic.

In the classroom: Amid a teacher shortage, states desperate to fill teaching jobs have relaxed job requirements as staffing crises rise in many schools. American students’ test scores have even plummeted to levels unseen for decades. One D.C. school is using COVID relief funds to target students on the verge of failure.

Higher education: College and university enrollment is nowhere near pandemic level, experts worry. ACT and SAT testing have rebounded modestly since the massive disruptions early in the coronavirus pandemic, and many colleges are also easing mask rules.

DMV news: Most of Prince George’s students are scoring below grade level on district tests. D.C. Public School’s new reading curriculum is designed to help improve literacy among the city’s youngest readers.