Is student loan debt forgiveness a measure to prop up President Joe Biden’s approval poll numbers or is it a commonsense strategy to lift up millions of borrowers struggling with debt?
Whatever the case, student loan forgiveness has become a political football, with Sen. Mitt Romney, R-Utah, questioning what “bribe” Democrats will offer next.
“Desperate polls call for desperate measures: Dems consider forgiving trillions in student loans. Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages? And put a wealth tax on the super-rich to pay for it all. What could possibly go wrong?” Romney tweeted Wednesday.
According to the results of a new Harvard Institute of Politics poll, just 41% of adults ages 18-29 approve of President Biden’s job performance, down from 46% in fall 2021 and a 59% majority last spring, according to a recent CNN report.
The Biden administration defends the plan
“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” Education Secretary Miguel Cardona said in a recent department press release.
The department has begun work “to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in income driven repayment (IDR) plans,” the press release states.
The latest steps are expected to help some 3.6 million borrowers move closer to debt forgiveness and 40,000 borrowers will receive immediate forgiveness, according to the Education Department.
Will Biden cancel student loans?
Biden on Thursday said he’ll make his decision around student loan forgiveness in coming weeks.
However, the president did say he’s “not considering $50,000 in debt reduction,” during a speech in the Roosevelt Room at the White House, CNBC reported.
“But I am in the process of taking a hard look at whether or not there will be additional debt forgiveness,” the president added. “I’ll have an answer on that in the next couple of weeks.”
Biden didn’t say how much debt he’s considering canceling — but along the 2020 presidential campaign trail he expressed support for forgiving $10,000.
Sen. Elizabeth Warren, D-Mass., is calling on the Biden administration to do more.
In a recent appearance on NBC’s “Meet the Press,” Warren challenged Biden to cancel $50,000 in student loan debt for tens of millions of people nationwide.
“You know, keep in mind 40% of the folks who have student loan debt do not have a college diploma. These are people who tried but life happened. You know, pregnancies and working three jobs and mom got sick and had to move to another city,” Warren said in the video tweeted Thursday. “All those things but now they earn what a high school grad earns, and they are trying to manage college level debt.”
Warren said there’s a “huge racial inequality here. African Americans borrow more money to go to school, borrow more money while they’re in school, have a harder time paying it off when they get out.”
It’s Democrats’ job “to help make people’s lives better. ... The president could do that all by himself.”
What does this mean in practical terms?
Earlier this month, the Department of Education extended the student loan payment pause through Aug. 31, which means federal student loan borrowers are not required to make federal student loan payments until that time. Private student loans are not eligible for relief.
It also means there is no new interest accrual on federal student loans and no collection of student loans in default.
Should I pay my student loans anyway?
According to Forbes magazine, federal student loan borrowers can save significant money by making optional student loan payments.
“This period of student loan relief is a unique opportunity to make additional student loan payments without new interest accrual. With a lower principal balance, this means less interest can accrue, which means you can pay off your student loans faster,” the magazine reported.