As Biden cancels up to $20,000 of student debt, some groups want more

Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020.

Paul Morigi | Getty Images Entertainment | Getty Images

President Biden’s long-awaited plan to forgive student debt, announced on Wednesday, drew immediate pushback from some lawmakers and consumer groups even as they praised the historic measure.

The White House said it would cancel $10,000 in federal student debt for most borrowers and up to $20,000 for recipients of Pell Grants, which are available to undergraduates based on financial need. The plan may eliminate balances for at least 9 million borrowers, according to higher education expert Mark Kantrowitz.

Biden ‘should have, and could have, done much more’

President Joe Biden on the South Lawn of the White House on July 12, 2022.

Biden cancels $10,000 in federal student loan debt for most borrowers

Nearly 8 million borrowers may be eligible for automatic relief; however, some borrowers may need to apply if the U.S. Department of Education doesn’t have relevant income data, according to the federal student aid website. That application isn’t yet available.

“We intend to keep fighting until all student debt is canceled and college is free,” Taylor said. “If President Biden can cancel this much debt he can cancel it all.”

Biden paired the debt cancellation and payment pause with a measure to cap undergraduate loan repayments at 5% of monthly income.

Warren, Schumer pledge to ‘pursue every available path’

“Make no mistake, the work — our work — will continue as we pursue every available path to address the student debt crisis, help close the racial wealth gap for borrowers, and keep our economy growing,” Schumer and Warren said.

Canceling $10,000 ‘hardly achieves anything’

“Canceling just $10,000 of debt is like pouring a bucket of ice water on a forest fire,” Johnson wrote in an op-ed. “It hardly achieves anything — only making a mere dent in the problem.”

Data suggest that doubling the maximum forgiveness amount — to $20,000 — for Pell Grant recipients would be most benefit Black students. To that point, 72% of Black students received a federal Pell Grant during the 2015-16 school year, about double the share of Asian and white students that year, according to most recent data from the National Center for Education Statistics.

Carlos Moreno, a senior campaign strategist at the American Civil Liberties Union, applauded the policy’s impact on Black borrowers.

“Student debt cancellation will help secure financial stability and mobility for people of color — particularly Black Americans — who are disproportionately burdened with student debt while providing immediate financial relief and peace of mind for millions of Americans,” Moreno said.

We intend to keep fighting until all student debt is canceled and college is free.

Astra Taylor

cofounder of the Debt Collective

Forgiveness could ‘make inflation even worse’

Source: https://www.cnbc.com/2022/08/24/as-biden-cancels-up-to-20000-of-student-debt-some-groups-want-more.html