Biden says he is looking closely at student loan relief

WASHINGTON — President Biden said Thursday he is considering writing off some student loan debt and will make a final decision “in the c...

WASHINGTON — President Biden said Thursday he is considering writing off some student loan debt and will make a final decision “in the coming weeks.”

“I’m looking at facing some debt reduction,” Biden said after a speech in the Roosevelt Room of the White House.

The comments were Mr Biden’s clearest signal yet that he could keep their promise to cancel at least part of the debt for student borrowers. During the 2020 campaign, he said he would “make sure everyone in this generation gets $10,000 off their student debt.”

The White House has come under intense pressure to provide relief through executive action, and Mr Biden this month extended a pause on loan repayments for the fourth time. But the president has made clear that his decision will disappoint at least some Democrats and progressive advocates who argue large-scale cancellation is needed to address economic and racial disparities and want him to eliminate $50,000 or more per borrower.

“I’m not looking at a $50,000 debt reduction,” Biden said. But he added that he was “looking closely” at debt cancellation.

“I will have an answer on this in the next few weeks,” he said.

The timeline comes after Mr. Biden discussed the issue with members of the Congressional Hispanic Caucus this week during a closed meeting at the White House. Rep. Tony Cárdenas, Democrat of California, said Biden signaled he was open to debt cancellation when asked if he would follow through on his $10,000 pledge. In a statement, Mr. Cárdenas said he was happy to see Mr. Biden confirming this position.

“The burden of debt is preventing far too many Americans from having financial stability, buying homes, starting families and building their futures,” Mr. Cárdenas said. “Providing debt relief to millions of Americans is the right thing to do.

Prior to that meeting, the White House had said throughout the year that it preferred that Congress handle student loan relief through legislation. But Senate Democrats lack the votes to help deliver on Mr. Biden’s campaign promise, leaving executive action as the only avenue.

The president has in the past expressed concern that forgiving $50,000 amounts to a giveaway to affluent college graduates, a stance that has led to pushback from advocacy groups.

“President Biden, we agree that we should not forgive $50,000 in student loan debt. We should cancel everything,” said Wisdom Cole, national director of the youth and college division of the National Association for the Advancement of Colored People, a civil rights organization. “$50,000 was just the bottom line. For the black community, which has racked up debt over generations of oppression, anything less is unacceptable.

Republican lawmakers are strongly opposed to the idea. Sen. John Thune of South Dakota, the second-tier Republican, on Wednesday introduced a bill that would prevent Mr. Biden from canceling student debt through executive action and end the payment pause that started in March 2020.

“Any future suspension of federal student loan repayments should be left to Congress, not the Biden administration,” Thune said.

Even extending the payment break has aroused some criticism from economists who say it will add to the fastest growing inflation in 40 years. The suspension of payments is giving consumers more money in their pockets to buy goods during a time of tight supply chains, fueling price hikes that have frustrated Americans.

Pressure from Biden supporters to act on student loans has only grown during the payment break, as the Department of Education faces logistical challenges to restart its payment collection system and repair long-standing administrative failures in its reimbursement and relief programs.

Under Mr. Biden, the department made piecemeal fixes that erased $18.5 billion in debt for 750,000 borrowers. His latest such effort came on Thursday, when he announced that he eliminate loans from 28,000 borrowers who attended the Marinello Schools of Beauty, a cosmetology chain that collapsed in 2016.

“Marinello preyed on students who dreamed of careers in the beauty industry, misled them about the quality of their programs, and left them buried in unaffordable debt they couldn’t repay,” said said Miguel A. Cardona, Secretary of Education.

Marinello engaged in “pervasive and widespread” misconduct, including failing to properly train his students and leaving them without instructors for periods that sometimes lasted for months, the department said. Those who attended the schools from 2009 will be forgiven of their federal loans, totaling $238 million, through a program known as the defense of the borrower to repayment.

Contrary to its usual practice, the ministry said it would automatically cancel the debts of all borrowers who attended Marinello during this time, even if they did not file a claim through the borrower defense system.

The Department of Education is struggling to fix the Borrower Defense Program, which was sued after it effectively stopped working for most of the Trump administration — then produced a deluge of denial notices.

Tens of thousands of borrowers are still awaiting decisions on applications, some of which were submitted six years ago. About 200,000 applicants — including 130,000 turned down by then-Education Secretary Betsy DeVos in the last year of the Trump administration — are part of a class action trial scheduled for this summer. The federal judge handling the case called Ms DeVos’ denials “Kafkaesque trouble”.

Another group of candidates sued the Department of Education on Monday over their long-unresolved claims. That court casefiled in federal court in Boston, seeks relief for borrowers who attended the Kaplan Career Institute, a former school whose parent company paid $1.3 million in 2015 to settle fraud charges brought by Maura Healey, the Massachusetts Attorney General.

Ms Healey asked the Department for Education in 2016 to cancel the debts of the school’s former pupils, but the request has remained undecided since then.

“Many borrowers have no idea what borrower defense is or how to apply, and so their best chance of getting relief from these predatory debts is through a group discharge,” said said Kyra Taylor, an attorney at the National Consumer Law Center, one of three groups representing borrowers in the case. “Enough is enough.”

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Newsrust - US Top News: Biden says he is looking closely at student loan relief
Biden says he is looking closely at student loan relief
Newsrust - US Top News
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