With a flick of his pen, President Biden cancels student loan debt. Here’s what that means.
Today, President Biden *finally* made the announcement that he will be canceling student loan debt, fulfilling a key promise he made on the campaign trail. Here’s how it shakes out:
- $10,000 in student loans will be canceled across the board
- Pell Grant recipients will be eligible for up to $20,000 in cancellation
- The Department of Education will be releasing a “short and simple” form to apply for student loan cancellation in the coming weeks
- Loan payments will be suspended another 4 months
- Nobody earning over $125,000/year will be eligible for relief at this time
The journey to this day started with activists from as far back as Occupy Wall Street. Until a few years ago, these activists had virtually no allies in Congress willing to stand with them. That changed in 2019 when Senator Elizabeth Warren released a plan for the next president to cancel student loan debt through executive action. She promised that she would cancel up to $50,000 in student debt, and she would do it without Congress. A lot of people thought she was crazy. They said it wasn’t actually constitutional (it is). They said people don’t deserve relief from their student loans (they do). And almost none of the 20-some-odd candidates who ran for president joined her in this call.
When Joe Biden was chosen to be the Democratic nominee, he recognized that although he won the most votes, he needed young people and progressives who supported Elizabeth and Bernie to show up for him in November. He made them a promise that he would cancel at least $10,000 in student debt. He also said he would forgive all student debt for those who had attended public universities and were of low-to-moderate income. The jury is still out on whether the president will follow through on the second half of his campaign promise. Nonetheless, this day would not have happened without Senator Elizabeth Warren’s leadership. She convinced Senate Majority Leader Schumer and about half of the Senate Democratic caucus to join her in her effort to compel the president to take the action he took today. There is no way this happens without her.
Today’s student loan cancellation will eliminate all debt for some student debt carriers and some debt for most student debt carriers with 90% of relief going to folks earning less than $75,000/year, however, a lot of folks will still carry massive outstanding balances. 45 million Americans collectively owe nearly $2 trillion in student loan debt. This crisis is so bad that some debtors are literally re-entering the workforce post-retirement because loan processors are garnishing their social security checks. Debtors are postponing having families, putting off starting new businesses, and choosing soul-sucking jobs they hate but need to take for the money. This is a great first step.
NAACP CEO Derrick Johnson penned an op-ed today condemning President Biden for arbitrarily capping student loan relief at $20,000. Four years after graduating, Black Americans hold an average of $53,000 in student debt. After that, they enter a workforce where they will earn less than their white counterparts and face discrimination in the housing market. This is why so many activists and advocates were calling for at least $50,000 in student loan cancellations. Now that the president has acknowledged that he does have the legal authority to cancel student debt, we can pressure him to go back to the drawing board and cancel more debt.
Just a few generations ago, college was debt-free and in many cases completely free. The GI Bill helped millions of WWII veterans get a free college degree, and for every $1 spent educating them, $7 was returned to the economy! That all changed in the 1960s when conservative governors like Ronald Reagan imposed tuition costs for the first time on California students. When he became president, he gutted funding for public education which forced states to charge much higher costs for their public universities.
We took a big, first step today to right the historic wrongs of decades of divestment from our public colleges and universities. Our next step should be to join over two dozen of our peer nations in making all public colleges and trade schools completely tuition free while canceling the remainder of student debt, reducing the racial wealth gap in the process. This won’t cost you more in your taxes. Remember, we don’t need to offset every penny we invest in education because the return on our investment will more than quintuple the initial cost. The Republicans are already making a stink with their usual corporate-backed talking points. I don’t remember them complaining when Trump issued $12 billion in direct checks to farmers to offset the economic pain of his trade war. I don’t recall them protesting Trump’s completely unfunded $2 trillion dollar tax cut for the rich and big corporations. In fact, they voted for and supported his agenda every step of the way. We bailed out the farmers. We bailed out Wall Street (twice). Now, we are bailing out working people trapped under debt that we should have never imposed on them in the first place. I am proud to be a member of the party that puts working people before billionaires.