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Using Loan To Fund College Education Tactfully
September 6, 2021
May 29, 2021
The Biden Administration’s $6 trillion budget proposal for the 2022 fiscal year is packed with progressive policy priorities including free community college and universal family and medical leave, but funding for student loan forgiveness didn’t make the cut.
After the Washington Post reported last week that the provision would likely be excluded, Biden drew criticism from advocates for what they viewed as reneging on a campaign promise.
The policy’s omission from the budget does not necessarily mean it won’t happen, however, since Biden has expressed support for $10,000 in loan cancellation per borrower—if Congress passes it—and he has asked the Department of Education to study his legal authority to cancel loans on his own, though that is considered a long shot.
In addition, on Monday, the Department of Education announced that it has begun the process of reviewing regulations on existing, narrower student debt relief programs, including income based loan repayment (followed by loan forgiveness after a certain number of years); public service loan forgiveness and borrowers’ defenses to repayment, if for example, they were defrauded by their schools.
$1.7 trillion. That’s how much debt student borrowers in the United States cumulatively owe, according to data from the Federal Reserve Bank of St. Louis.
Asked last week about the likely omission of student loan forgiveness and other progressive priorities from the budget, White House Press Secretary Jen Psaki responded: “Will every single thing [Biden] wants to get done in his presidency be reflected in the budget? It won’t. But that doesn’t mean he’s not committed to it, and it doesn’t mean that he doesn’t have a desire to move all of these agenda items forward that he talked about in his joint-session address, and that he talked about when he was running for President.” The budget also omitted proposals to reform the American unemployment insurance program and to reduce the price of prescription drugs, though it does call on Congress to lower drug costs, and Biden has expressed support for an unemployment overhaul.
While Biden has expressed support for legislation that would forgive federal student loan debt up to $10,000, that’s much less than the $50,000-per-person forgiveness that progressives in Congress including Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) support. In an interview with the New York Times published last week, Biden indicated that he doesn’t agree with the scope of the larger progressive proposals for student loan forgiveness. “The idea that you go to Penn and you’re paying a total of 70,000 bucks a year and the public should pay for that? I don’t agree,” he said.
While student debt was not a part of the $6 trillion proposal released by the White House on Friday, a number of other progressive policy priorities were included. Biden’s $1.8 trillion American Families Plan would provide two free years of community college and two free years of universal pre-Kindergarten, it would extend or make permanent the tax credits aimed at children or families that were expanded by the American Rescue Plan in March, and it would establish programs for paid family and medical leave. Of course, Biden’s budget is only a proposal: it’s ultimately up to Congress to enact any new spending into law.
Source: Forbes
Image Source: Getty Images
