Progressives Mount Last-Minute Push for Student Loan Forgiveness

With just days remaining before a self-imposed deadline for an announcement on student loan debt, progressive activists are badgering President Biden to make good on campaign promises to forgive at least part of the $1.6 trillion in outstanding student debt owed by Americans.Many of the activists, among them Senators Warren and Sanders, are urging the president to go even further than he has promised and sidestep Congress by canceling all outstanding student loans via an executive order. Observers both in the administration and outside of it are said to be unconvinced that acting without congressional authority on a spending measure would be legal. An Ohio activist who is an acolyte of Senator Sanders, Nina Turner, spent much of the weekend and into Monday demanding that Mr. Biden go big on the issue. Ms. Turner likened the government’s cancellation of student loans to what was done with Paycheck Protection Program loans from the early days of the Covid pandemic.Student debt cancellation, she wrote, “isn’t paid for by the taxpayers, the federal government is the lender.”The AFL-CIO also joined the fray Monday morning, using Twitter to urge the president to cancel, not collect, on outstanding student loans and suggesting that 97 percent of the 40 million or so student loan borrowers are low- to middle-income Americans. According to the nonpartisan Education Data Initiative, Americans with income higher than the national average hold some 65 percent of outstanding student debt.In an appearance on NBC’s “Meet the Press” on Sunday, the education secretary, Miguel Cardona, gave no indication which way the president was leaning on the issue but promised an announcement in the coming days.“We know August 31st is a date that many people are waiting to hear something from,” Mr Cardona said. “We’ve been talking daily about this. And I can tell you that American people will hear within the next week or so from the president and the department.”Despite the high signal-to-noise ratio coming from progressives, Mr. Biden’s campaign trail promises on the topic never came close to advocating a complete reset on all student loans. What he did promise in the days and weeks leading up to the November 2020 election was to reduce every borrower’s debt load by $10,000 if they have an annual income below $125,000.At the outset of the pandemic, President Trump placed a moratorium on all payments and interest accrual on federally subsidized student loans. Mr. Biden has extended that moratorium four times, most recently in April. It is due to expire at the end of the month.Since taking office, Mr. Biden has canceled some $32 billion in outstanding loans held primarily by students who attended for-profit institutions that later lost their accreditation or otherwise ran afoul of federal regulators. He also has expanded a Public Service Loan forgiveness program that cancels the debt of government and nonprofit workers after a decade of payments.Opponents of the efforts to forgive loans argue that widespread student loan forgiveness would amount to one of the largest wealth transfer programs in American history and benefit primarily upper-income individuals. Budget hawks have also complained that the existing moratorium is costing taxpayers as much as $4 billion a month, as much as $100 billion since it was initiated.A former treasury secretary and president of Harvard University, Larry Summers, took to Twitter Monday morning to urge the administration not to contribute to inflationary pressures on the economy by initiating what he called “overly generous” student debt cancellation programs or continuing down the path taken over the past two years.“The worst idea would be a continuation of the current moratorium that benefits among others highly paid surgeons, lawyers and investment bankers,” Mr. Summers wrote. “If relief is to be given it should not set any precedent, it should only be given for the first few thousand dollars of debt, and for those with genuinely middle class incomes.”

Progressives Mount Last-Minute Push for Student Loan Forgiveness

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