Biden will name on Congress to cancel pupil debt of $ 10,000
US President-elect Joe Biden is fighting for US Senate Democratic candidates Jon Ossoff and Raphael Warnock at a pre-election rally in Atlanta, Georgia, January 4, 2021.
Jonathan Ernst | Reuters
President-elect Joe Biden will urge Congress to immediately cancel student debts of $ 10,000 for all borrowers and extend the payment hiatus, which is due to expire this month, an aide said Friday afternoon.
The $ 900 billion pandemic relief package passed in December did not include an extension of the student loan borrower payment hiatus, which began in March and expires at the end of the month, and many borrowers are unable to make their payments.
In a recent Pew survey, 6 in 10 borrowers said they would find it difficult to repay their student loan bills in the coming month. The vast majority – or around 90% – of federal student loan borrowers took advantage of the government’s opportunity to suspend their payments during the pandemic, data shows.
It remains unknown how long Biden’s payment break will be extended.
The president-elect’s commitment to cancel $ 10,000 student debt lives up to his promises for the campaign, despite mounting pressure to reduce more debt and bypass Congress to do so.
Administrative or legislative forgiveness?
Senate top Democrat Chuck Schumer, DN.Y., calls on Biden to award $ 50,000 per borrower on the first day of his presidency. “All you need is the movement of a pen,” said Schumer in December. “You don’t need a congress.”
Meanwhile, Senator Elizabeth Warren, D-Mass., Recently described student debt relief as “the most effective economic stimulus that can be achieved by executive action.”
Not everyone agrees. Experts say Biden would likely be brought to justice if he canceled the debt himself.
And now that the Democrats have won a majority in Congress, the legislative path seems more hopeful. However, it is a long way from hopeful to borrowers whose debt is reduced or eliminated.
Even with the two Democratic Senate seats in Georgia, the party has just gained a majority and will need Vice President-elect Kamala Harris to garner 51 votes against the 50 Republicans.
Not all Democrats may be on board for student debt relief, and even if they were, the rules of procedure in the Senate generally require the legislation to receive 60 votes. It will be difficult to get nine Republicans on a debt anniversary.
“With democratic scrutiny of government, Republicans are likely to reaffirm their interest in the federal deficit and government spending,” said Laurel Harbridge-Yong, associate professor at Northwestern University.
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However, there may be a way to bypass these rules. A once-a-year legislative process known as budget balancing will allow Democrats to pass laws by simple majority. In 2010 the Democrats pushed through the final version of the Affordable Care Act. So the Republicans passed their massive tax cuts in 2017.
There are limits to this method, however, said Ryan D. Doerfler, a law professor at the University of Chicago. “Democrats can only use reconciliation procedures three times in the next two years,” he said. Since this procedure can only be used once a year, there is usually a lot of competition over what to include, and this is especially true during the pandemic.
Legislation on reconciliation must also address budget changes, and Senators can try to block provisions they claim are not.
Given the uncertainty surrounding passing laws to cancel student debt, lawyers and Democrats continue to urge Biden to administratively terminate the loans. Borrowers cannot afford to wait for relief.
“President Biden has the historic opportunity to improve the lives of tens of millions of American families struggling amid a national crisis,” said Seth Frotman, who served as student loan ombudsman for the Consumer Financial Protection Bureau during the Obama administration.