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President-elect Joe Biden has affirmed his support for the “immediate” cancellation of certain student debts.
In response to a question at a Monday press conference, Biden reiterated his support for a provision passed under the HEROES Act, which the Democratic-controlled House update October 1. The provision calls on the federal government to repay up to $ 10,000 in private and non-federal student loans for “economically distressed” borrowers. Biden specifically highlighted “people … having to make choices between paying their student loans and paying rent,” and said debt relief “should be done immediately.”
Senate Democrats are pushing for much more debt relief. Senate Minority Leader Chuck Schumer, co-author a resolution in September with Senator Elizabeth Warren calling on the next president to write off up to $ 50,000 in outstanding federal student loans per borrower. According to College Board data, that would mean wiping out all the debts of more than three-quarters of borrowers.
Senators cited an opinion lawyers at a Harvard legal clinic who argue that the power to write off federal student loan debt rests with the president and his secretary of education, since it is the Department of Education that is the origin of these loans. This means that it can be done regardless of who controls the Senate without passing new laws.
He can be done – but should it be done? Some economists support the cancellation of student debt will stimulate the economy, allowing young people to start a business, buy a house and even start a family.
Warren, in his presidential campaign proposal, cited arguments that debt cancellation would narrow the racial wealth gap, reverse the rural brain drain and allow more people to complete their education. Militant groups such as the Debt collective go further, arguing that student debt is in principle wrong. “We need to restore education to the status of a public good,” the organization says on its website.
Critics point out that people with a college degree typically make more money than those without. They say that the cancellation of student debt is, in this sense, regressive, because it is a form of economic aid intended for people who are already advantaged. Some commentators also see a partisan trend towards debt cancellation. This is because white voters without a college degree are much more likely to vote Republican. And then there is the moral hazard argument – that debt cancellation would make people take more student loans and act irresponsibly in the future.
Tying debt cancellation to the COVID-19 emergency and targeting economically struggling people, as Biden is asking, could reduce these kinds of criticisms.
And Biden linked his approval of debt cancellation with the idea of lowering the cost of college education through increased federal aid in the future, “everything from community college to doubling Pell grants to ensuring that we have access to free education for everyone. [from households] earn less than $ 125,000 for four years of college, ”he said.
His wife, Jill Biden, a community university professor, echoed call for free community college in a remote keynote address, she gave Monday to a group called College Promise, of which she is the former honorary president. College Promise supports and advocates a network of 360 local free college programs across the country, which operate with a mix of public and philanthropic support.