The White House is looking at income ceilings for eligibility for student loan relief that would exclude higher-income Americans as President Biden approaches a decision on the issue, according to three people familiar with the administration’s deliberations. The administration is considering various ways to forgive some student loan debt through enforcement actions. In recent weeks, senior Biden associates have considered limiting relief to those who earned less than $ 125,000 or $ 150,000 as individual nominees last year, people said. That plan would set a limit of about $ 250,000 or $ 300,000 for couples filing their taxes together, people said. No final decisions have been made and people familiar with the matter have stressed that the design was fluid and subject to change. President Biden has the power to forgive student loan debt. He will? And what would that mean for average Jo? (Video: Monica Akhtar, Sarah Hashemi / The Washington Post) Biden signals openness to canceling student loans The White House also weighs exactly how much student debt it should eliminate for each borrower. Biden told reporters this week that the amount would be less than $ 50,000 per person. Government officials have also indicated that the White House will cut at least $ 10,000 per eligible borrower, the people said, adopting a position Biden himself appeared to support in a private meeting with the Spanish Congressional Caucus. The administration has also discussed limiting forgiveness to undergraduate loans, with the exception of those who have taken loans for professional degrees in areas such as law and medicine, people said. “There are different proposals around the administration on how to structure this,” said one person who took part in the discussions, who spoke on condition of anonymity to reflect on private conversations. “Over the past week in particular, the administration and staff of Congress have focused the debate on debt relief on how best to respond to the president’s desire to ensure that the most vulnerable students with student debt benefit from any action. ». The Washington Post reported for the first time this week that Biden signaled at a recent meeting of Hispanic lawmakers that he planned to take significant action to alleviate student debt. On Thursday, the president publicly confirmed that he was considering the matter and expected to make a decision “in the next two weeks”. The government has already extended the Trump administration’s moratorium on loan repayments, originally caused by the coronavirus pandemic, until August 31. Biden’s recent comments have sparked much debate as to whether student debt relief would really benefit borrowers in need or, in particular, help wealthier college graduates who have chosen to take out heavy loans. White House officials are considering adding income cuts to counter Republicans’ arguments – but also repeated by the central Democrats – that debt relief rewards higher-income college graduates who do not need federal help. A White House spokesman declined to comment on the internal affairs, but said in a statement that the government was considering options for relief, noting the president’s support for reducing the $ 10,000 debt through legislation. The administration has also taken steps that have resulted in the release of more than $ 17 billion in loans to more than 700,000 borrowers, the spokesman said. Continuing to cut interest rates and payments on student loans has saved tens of billions for the 41 million student borrowers, the spokesman said. But the loan write-off in question would go much further. In 2019, the most recent year for which data are available, 97% of total student debt was held by individuals earning below $ 150,000 per bachelor and $ 300,000 per couple, according to Matt Bruenig, its founder People’s Policy Project. left-leaning thinking tank. Debt $ 10,000 debt relief for each student borrower would cost about $ 245 billion, according to the nonprofit Federal Budget Committee, which advocates reducing federal debt. The average amount borrowed from college graduates in 2020 who took out loans to pay for their degrees was $ 28,400, according to the College Council. Fifty-four percent of borrowers owed less than $ 20,000, while 10 percent owed at least $ 80,000. Even a substantially more severe income cut would be unlikely to appease critics of student loan write-offs. Student debt is held mainly by Americans with above-average incomes, and the poorest 20 percent of Americans, as measured by income, own only 8 percent of the total student debt, according to the People’s Policy Project. In 2019, 44 percent of adults who earned below the $ 47,500 average had no education beyond high school, compared with just 19 percent of those who earned more than that. Conservative economists and Republicans have already spent the week with Biden on the idea of forgiving college loans. “This is the basis of the Democratic Party – upward-moving professional bourgeois with high incomes. “Granting college graduates with often expensive postgraduate degrees will really hurt those who did not go to college, as well as those who paid off their student loans,” said Brian Riedl, a conservative policy analyst at the Manhattan Institute. thought tank. “It’s a slap in the face.” But Biden is under significant pressure to take action, especially during the collapse of the rest of the White House’s financial agenda to reduce the cost of health care, housing and other household expenses. The Spanish Congressional Caucus and the Congressional Caucus are among those who pushed the administration to take aggressive action, in part because Black Americans represent a disproportionate share of student debtors. Blacks make up 16 percent of the U.S. population, but they owe 23 percent of the nation’s student debt. The US could have forgiven thousands of student loans, but never told borrowers Representative Alexandria Ocasio-Cortez (DN.Y.), who pushed the White House to forgive the student debt, said the administration would have to cancel up to $ 50,000 per borrower and expressed concern that $ 10,000 would not equated to substantial improvement for many People. For Americans owed $ 30,000 or more, canceling $ 10,000 out of that would not significantly affect their monthly payment obligations, a difficulty exacerbated by the reduction in inflation-adjusted wages for millions of workers, he said. While student borrowers, like college graduates as a whole, have higher average incomes than Americans overall, those who owe student loans are much less wealthy than most college graduates. More than half of student debt is held by people with virtually no wealth, according to the People’s Policy Project. The richest 20 percent of the population has only a small fraction of student debt. “I do not believe in a cut, especially for so many front-line workers who are drowning in debt and are likely to be excluded from relief,” Ocasio-Cortez said. He added that a national income threshold does not represent the much higher cost of living in some parts of the country. “The $ 50,000 debt cancellation is where you are really causing a rift in inequality and the racial wealth gap. “$ 10,000 is not.” Economist Larry Summers, who served under Presidents Bill Clinton and Barack Obama, said he would prefer Biden to adopt policies that target half of the population that did not go to college, which generally has less money than those who do. He also said there were “concerns” that student debt write-offs could increase inflation, depending on the total amount of loans granted. However, Summers stressed that the government’s current policy – a moratorium on loan repayments – is more misguided than one that would reduce debt to a specific segment of the population. “I would rather people who have not gone to college have priority than people who have gone. “Period,” Summers said. “But it is better to have a limited, targeted program than a general relief.”
