Why President Biden’s student loan forgiveness can be delayed

While Nate Wlodarchak took people to the polls on election day, he could not stop representing his life without student debt. On the way to the campaign, now President Joe Biden had promised to forgive $ 10,000 in loans for all borrowers, which would virtually restore Wlodarchak’s balance to zero.

Without the loans weighing on him, Wlodarchak, 37, a scientist studying tuberculosis, could direct more and more of his salaries to his savings each month. And she and her husband, Shawn, who live outside of Denver, could finally start thinking seriously about the many goals, such as having children, that they have had to leave behind.

Now Wlodarchak and tens of millions of other borrowers with student loans are looking for the new president to ease some of their debt burden. “We took into account her promise to make it a core priority,” Wlodarchak said.

However, with the Biden administration in the midst of historic and double economic and health crises, student loan forgiveness may not come as quickly as some had hoped. People’s vaccination against Covid, the reopening of schools, and financial aid to unemployed and food-eating Americans are likely to be a priority.

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In addition, there is also a heated and unresolved debate over whether debt cancellation should be delivered through legislation passed by Congress or executive action by the president.

Advocates say forgiving student debt is a crucial part of any meaningful response to the coronavirus pandemic, noting that borrowers already had problems before the crisis. In fact, even before nearly a year of record job losses and when the country was in the midst of the longest economic expansion in history, more than one in 4 student loan borrowers had delinquency or default.

Others point out that it is people of color who are suffering the brunt of the student loan crisis, and it is also blacks and Latin Americans who have suffered the most from the coronavirus pandemic. An aide to Senator Elizabeth Warren, Massachusetts, said the cancellation of student debt would make great strides toward closing the racial gap from the Civil Rights movement.

“Debt cancellation would have a huge impact on those most affected by the coronavirus pandemic: black Americans, larger borrowers and recent graduates,” said Alexis Goldstein, senior policy analyst at American for Financial Reform .

On his first day in office, President Biden signed an executive order extending the pause of monthly payments for federal student loan borrowers until September 2021.

Mike Calhoun, president of the Center for Responsible Lending, called the action a “critical first step,” but went on to say he hopes the Administration will consider widespread cancellation, which could provide families with a path to to equity and funding advancement “.

At a news conference in late November, a journalist asked then-president-elect Biden where he was at the time of forgiving the student loan debt.

“They have real problems,” said Biden, of the borrowers. “They have to make decisions between paying off their student loan and paying the rent, that kind of decision. It should be made immediately.”

However, the president’s scheme on a $ 1.9 trillion stimulus package unveiled this month does not mention student debt cancellation. Senior Biden administration officials argue that the president still admits forgiveness of $ 10,000 per borrower.

“It’s hard to know how to read tea leaves,” said Rick Hess, director of educational policy studies at the American Enterprise Institute.

Higher education expert Mark Kantrowitz said Biden’s Covid aid plan focuses on the most pressing issues of the public health crisis and that debt cancellation is likely to come later.

“I think the odds of some student loan forgiveness being applied are as good as ever,” Kantrowitz said. “But no legislation will probably be proposed until late summer or early fall.”

Passing this legislation can be difficult.

Even with Democrats ’Senate career victories in Georgia, they got the most slimest majors and only have 50 members out of 50 Republicans, with Vice President Kamala Harris able to cast a tiebreaker vote when it was necessary. Many on the right argue that a jubilee of student debt would not significantly stimulate the economy, as college graduates tend to have higher incomes that are likely to redirect their monthly bill to savings rather than additional expenses.

Arguing that the legislative path is too long and risky, advocates and other Democrats are asking Biden to cancel the debt sooner with executive action.

Senate Majority Leader Chuck Schumer, DN.Y., is pressuring Biden to immediately forgive $ 50,000 per borrower. “All you need is a pen touch,” Schumer said last month. “You don’t need Congress.”

And Warren described student debt forgiveness as “the most effective economic stimulus available through executive action.”

In response, Biden said it would be “unlikely” that he would cancel the $ 50,000 student debt for all borrowers on his own, though a Warren aide said they continue to file the case with the new administration for to the cancellation of the debt by the President.

For now, Wlodarchak continues to hope that his student loans will finally be forgiven. She has her plan for herself and when they will: she will take her husband to an elegant surf and lawn dinner.

And he even knows what he will ask for. “A porter with morels and a cold water lobster, red wine of course,” he said. “Oh, and Bananas Foster for dessert!”