President Joe Biden will soon make a decision on forgiving student loan debt. But first, the Education Secretary has to finish his homework assignment.
On Thursday morning, White House Chief of Staff Ron Klain told Politico that the administration was studying the issue. Education Secretary Miguel Cardona is tasked with drafting a memo on the president’s “legal authority” to cancel student loan debt of up to $50,000. It’s unclear if Cardona, a former fourth grade teacher, faces a deadline.
Biden will “look at the policy issues around that and he’ll make a decision,” Klain said. “He hasn’t made a decision on that either way and, in fact, he hasn’t yet gotten the memos that he needs to start to focus on that decision.”
Biden has resisted calls from progressives like Senator Elizabeth Warren (D-MA) to cancel $50,000 of student loan debt. He’s indicated that he’s more comfortable with a $10,000 limit and added that the government shouldn’t be bailing out people who went to “Harvard and Yale and Penn.”
A provision in The American Recovery Plan – passed in March – makes loan forgiveness tax-free through 2025. Warren, who co-authored the provision, said it eliminates one of Biden’s chief concerns – that is, it prevents any surprise tax bills for Americans whose debt is impacted.
“This bill helps pave the way to cancel $50,000 in student loan debt,” Warren told reporters.
In March, Biden’s Department of Education announced a new policy that will cancel nearly a billion dollars in debt held by 73,000 Americans who were defrauded by for-profit colleges. The move reversed a Trump-era directive.
There are currently 45 million Americans who collectively owe nearly $1.7 trillion in student debt. Student debt is the second highest debt category in the country, following mortgages.
