Biden could explore $ 50,000 student loan cancellation, chief of staff hints

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President Joe Biden is exploring the possibility of canceling student loan debt of up to $ 50,000 per debtor, his chief of staff Ron Klain said Thursday. Biden asked Education Secretary Miguel Cardona to write a note explaining how he could legally do it as president.

“He asked his secretary of education – who has just taken the post a few weeks – once in office to ask his department to prepare a note on the legal authority of the president. Hopefully we will see this in the next few weeks ”, said Klain in an interview with Politicsit’s Ryan Lizza. “And then he’ll look at that legal authority, he’ll look at the policy issues around it, and he’ll make a decision.”

Although Biden is already out against the cancellation of $ 50,000 student debt value, Klain did not confirm the amount Biden envisioned when Lizza specifically asked for the figure of $ 50,000.

Biden also previously asked the Ministry of Justice to examine the legality of the cancellation of student debt by decree. Betsy DeVos, former head of Donald Trump’s education department, advised against canceling student loans when she left her post in January. DeVos was infamous for weakening considerably student loan waivers and rejection of borrowers who have legitimately requested waivers.

Monday, Cardona issued a waiver to make it easier for people with disabilities to cancel their student loans. Previously, people with disabilities seeking to have their student loans canceled were subject to a three-year monitoring period during which they were required to submit documents annually proving that their income was below or equal to the poverty line.

The department has now waived the requirement for this paperwork for the duration of the pandemic and made it retroactive to the time Trump first declared a national emergency in March of last year.

The ministry says that this will help more than 230,000 borrowers. More than 41,000 borrowers who reinstated $ 1.3 billion in loans due to failure to file their income will have their loans canceled and will be reimbursed for payments they made during the pandemic; the other 190,000 will not have to submit proof of income.

The Biden administration also announced on Tuesday the extension of a pause on student loan interest for over a million borrowers in default. It protects people receiving loans under the federal family education loan program from seizing their tax refunds, White House press secretary Jen Psaki said.

Biden has previously said he was in favor of Congress canceling $ 10,000 in student loan debt per borrower and that any relief up to $ 50,000 should be targeted. Biden has previously said he doesn’t want forgiveness given to people who have gone to “Harvard and Yale and Penn. ”

But Progressives and Democrats have pushed it to overturn more, which lawmakers like Senator Elizabeth Warren (D-Massachusetts) and Senate Majority Leader Chuck Schumer (D-New York) say he can. do with the “pencil stroke”Via a decree.

Lawmakers, alongside education law experts, argue that it is perfectly legal to do so. Senators Schumer and Warren announced a proposal in February, calling on Biden to write off up to $ 50,000 for all borrowers. They say it’s not only the morally correct thing to do, but it would also help jumpstart the economy in a time of great need.

Supporters of student debt cancellation claim it would translate into significantly better economic outcomes for people who have incurred their own debt or their child’s debt. “Data shows that canceling student loan debt would lead to higher homeownership rates, greater housing stability, improved credit scores, higher incomes, higher GDP, more small business creation and more jobs, ”Warren said. said in february.

Since the idea of ​​canceling student debt has gained popularity in recent years, Democrats and activists have continually called on Congress and the President to use their powers to free members of the public from student loans. Student loans can take decades to pay off and are an oppressive force in the lives of many who have taken on debt for something loan cancellation activists say is a fundamental right.

Warren, Schumer and Sen. Bob Menendez (D-New Jersey) inserted a provision in last month’s stimulus bill to help pave the way for Biden to cancel student loans. Supply ensure that canceling loans would be tax-exempt until 2025, eliminating the possibility of a surprise tax bill for those whose loans are canceled.

Unions representing teachers, firefighters and healthcare workers have also recently calls on Biden cancel the student debt of people working in the public service via an executive decree. The Civil Service Loan Cancellation Program promises that those who have paid off their loans and worked in the civil service for 10 years can get the rest of their loans canceled. But the program is deeply broken and mismanaged, and over 98 percent of those who apply are rejected.

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