Biden will offer debt relief soon, but how soon?

As President Biden approaches an announcement about a possible plan to cancel some of the $ 1.7 trillion in student loan arrears, rumors are circulating about when the final announcement will take place and what the policy might look like, for which there is no predictable answer. Possible timeline or final policy.

A The Wall Street Journal The article, published Tuesday, says administration officials thought an announcement could be made as soon as this Saturday, when Biden is scheduled to deliver an introductory speech at the University of Delaware.

Officials, however, also said that no final decision had been reached by the president.

The House Democratic Assistant confirmed Inside higher ed That they have not yet heard from the Biden administration that a final announcement of debt relief was planned for Biden’s introductory speech on Saturday. They said Biden’s announcement of debt relief would be delayed because of Tuesday’s mass shootings at an elementary school in Texas.

With the question of when and what will be Biden’s final decision on debt relief, higher education leaders have provided little information on how to prepare for what could be one of the biggest changes to federal policy for higher education in decades.

What’s coming

Scott Buchanan, executive director of the Student Loan Servicing Alliance, which represents 95 percent of lenders providing federal student loan services, said that whatever Biden announces, it could take months for lenders to administratively implement Biden’s proposal. In addition, the lack of communication between the administration and the service providers has given them little room to prepare for such changes.

“If the past is a proposal, then we don’t have any pre-existing information. I hope and I hope and I hope they change that habit so that we can actually get some guidance and be ready to answer thousands of phone calls – if not noticed – what we can get is what borrowers are asking for. What does that mean, ”said Buchanan.

In late April, Biden told reporters at a White House press conference that he would make a decision on debt relief in a few weeks. Additionally, Biden told reporters that he was not considering reducing the debt to 50,000 per borrower, an image that has been backed by progressive Democratic senators such as Chuck Schumer of New York, Elizabeth Warren of Massachusetts and Raphael Warnock of Georgia.

A number of different proposals have entered the public debate on how Biden should work to forgive student loan debt. This includes income-based relief, which many higher education experts and education officials say could impose administrative burdens.. The Washington Post It was reported in April that the administration had considered an income limit excluding borrowers earning more than $ 125,000 to $ 150,000 a year.

Biden himself advertised in a central pledge that each borrower would be relieved of at least $ 10,000 per student loan.

Payment of student loans has been suspended since the onset of the epidemic and has been extended to August. Pressure from Democrats and voters has pushed the issue of student loan waivers into the national spotlight and raised many questions about how it will be implemented administratively.

“Even if they do it very simply, it’s going to be complicated,” Buchanan said. “I think it’s going to be a frustration for the borrowers as well, because they’re going to have to wait a few months to get this forgiveness.”

Delays in forgiving borrowers could have political consequences for administrative overload bids borne by loan service providers, as mid-term elections in November come just weeks after the end of the student loan repayment break.

“We all know that this is a political decision, not a good policy decision, and the real question is, will you be able to do it during the November election?” Buchanan asked.

Send it back

While support for debt relief is consistent among Capitol Hill Democrats, Republicans have strongly opposed Biden’s pressure to repeal, and several lawmakers have questioned Biden’s authority to wipe out student debt through executive action.

Last week, a coalition of Republican senators raised a bill that would prohibit the Biden administration from canceling student loans. Republicans argue that the authority to cancel student loans is strictly in the hands of Congress.

With minority Republicans, several higher education experts have reported Inside higher ed These proposals are unlikely to get traction in Congress. However, some have speculated that a lawsuit could challenge Biden’s executive authority through legal means.

“It simply came to our notice then. If anyone sues and says the president has no authority, the question is who will sue, “said Terry Hartle, senior vice president for public relations and public affairs at the American Council on Education.

The Harvard Law School Legal Services released a policy memo in late 2020 stating that the president could use executive authority to direct the Department of Education to cancel federal student loans.

Leave a Reply

Your email address will not be published.