WASHINGTON (AP) — President Joe Biden is expected to announce his long-delayed decision on Wednesday to forgive up to $10,000 in federal student loans for many Americans and extend a break in payments until January, according to three people familiar with the matter. plan.
Biden faced pressure from liberals to provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread pardons. The delay in Biden’s decision has only heightened anticipation for what his own aides acknowledge is a no-win political situation. People spoke on condition of anonymity to discuss Biden’s intended announcement ahead of time.
The precise details of Biden’s plan, which will include an income ceiling limiting pardons to only those earning less than $125,000 a year, were being kept in an unusually small circle within the Biden administration and have yet to be finalized on the eve of the announcement.
Direct decision-making has been a hallmark of Biden’s White House, but the specific delay on student loans reflects the vexing challenge he faces in delivering on an important campaign promise.
The plan would likely totally eliminate the student debt of millions of Americans and eliminate at least half a million others.
The country’s federal student debt now tops $1.6 trillion, after rising for years. More than 43 million Americans have federal student debt, with nearly a third owing less than $10,000 and more than half owing less than $20,000, according to the most recent federal data.
The continuation of the pandemic-era payment freeze comes just days before millions of Americans find out when their next student loan bills are due. This is the closest the government has come to reaching the end of the payment freeze extension, with the current pause set to end on August 31.
Wednesday’s announcement was set for the White House after Biden returned from vacation in Rehoboth Beach, Delaware. The government briefly considered higher education schools in the president’s home state for a bigger reveal, but scaled back its plans.
Biden was initially skeptical of canceling student loan debt as he faced off against more progressive Democratic senators Elizabeth Warren and Bernie Sanders, who had proposed cancellations of $50,000 or more during the 2020 primaries.
As he tried to bolster support among younger voters and prepare for a general election battle against then-President Donald Trump, Biden presented his initial debt cancellation proposal of $10,000 per borrower, with no mention of an income ceiling.
Biden has narrowed his campaign pledge in recent months by adopting the income cap, as rising inflation has taken a political toll and as he aims to avoid political attacks that canceling would benefit those with the highest salaries. But Democrats, from members of the Congressional leadership to those facing tough re-election bids in November, have pressed the administration to go as far as possible on debt relief, seeing it in part as an exhilarating issue, particularly for blacks and young people. voters this fall. .
The frantic last-minute lobbying continued on Tuesday, even as Biden remained on his summer break. Senate Majority Leader Chuck Schumer, DN.Y., one of the loudest advocates in recent years for canceling student loan debt, spoke privately on the phone with Biden, imploring the president to forgive as much debt as possible. government can, according to one Democrat. with knowledge of the call.
In his speech, Schumer argued with Biden that doing so was the right thing to do morally and economically, said the Democrat, who requested anonymity to describe a private conversation.
Inside the government, officials have been discussing since at least the beginning of the summer writing off more than $10,000 in student debt for certain categories of borrowers, such as Pell Grant recipients, according to three people with knowledge of the deliberations. That remains one of the final variables considered by Biden ahead of Wednesday’s announcement.
Democrats are betting that Biden, who has seen his public approval rating drop last year, can help motivate younger voters to the polls in November with the announcement.
While Biden’s plan is narrower than what he initially proposed during the campaign, “he will get a lot of credit for delivering on something he was committed to,” said Celinda Lake, a Democratic pollster who worked with Biden during the 2020 election. .
She described student debt as an “entry issue” for younger voters, meaning it affects their opinions and decisions about housing affordability and career choices. A survey of 18-29 year olds conducted by the Harvard Policy Institute in March found that 59% of respondents favored some form of debt cancellation — whether for all borrowers or those most in need — though student loans do not rank highly among the issues that most concerned people in this age group.
Some defenders were already bracing themselves for disappointment.
“If the rumors are true, we have a problem,” said Derrick Johnson, president of the NAACP, who has aggressively pressed Biden to take bolder steps on Tuesday. He emphasized that black students face higher debut charges than white students.
“President Biden’s decision on student debt cannot become the latest example of a policy that has left black people – especially black women – behind,” he said. “This is not how you treat black voters who turned out in record numbers and provided 90% of their votes to once again save democracy in 2020.”
John Della Volpe, who worked as a consultant on the Biden campaign and is director of research at the Harvard Kennedy School of Politics, said the details of Biden’s announcement are less important than the decision itself.
“It’s about trust in politics, in government, in our system. It is also a matter of trust in the individual, which in this case is President Biden.”
Combined with fears about expanding abortion restrictions and Trump’s resurgence on the political scene, Della Volpe said the student debt forgiveness “adds a tailwind to a position that is already improving with young people.”
Republicans, for their part, see only political advantages if Biden seeks a large-scale cancellation of student debt before the November election, anticipating a backlash from Democrats — particularly in states where there are large numbers of working-class voters without a college degree. . Critics of widespread student debt forgiveness also believe it will open the White House to lawsuits, claiming that Congress never gave the president explicit authority to cancel the debt on his own.
The Republican National Committee on Tuesday criticized Biden’s expected announcement as an “alms to the rich,” claiming it would unfairly burden low-income taxpayers and those who have already paid off their student loans with covering the costs of higher education for the wealthy. .
“My neighbor, a detective, worked 3 jobs (including selling rugs) and his wife worked to ensure their daughter had a quality college degree with no student debt,” Representative Kevin Brady, R-Texas, the leading Republican of the House Ways and Means Committee, tweeted Tuesday. “Great sacrifice. Now your taxes must pay off someone else’s student debt?”
Biden’s protracted deliberations caused federal loan officers, who were instructed to withhold billing statements while he weighed a decision, grumbling.
Industry groups complained that the delayed decision left them with just days to notify borrowers, retrain customer service employees and update websites and digital payment systems, said Scott Buchanan, executive director of the Student Loan Servicing Alliance.
That increases the risk that some borrowers will be inadvertently told they need to make payments, he said.
“At this final stage, I think that’s the risk we’re taking,” he said. “You can’t just make a dime with 35 million borrowers, all with different loan types and status.”
Associated Press writers Zeke Miller and Collin Binkley contributed from Washington.