“We will wait for that conclusion before a final decision is made,” said Psaki.
The schedule offered is the latest indication of discomfort that the Biden White House has with calls to act quickly and aggressively in forgiving student debts. In a CNN town hall late on Tuesday, Biden ruled out canceling $ 50,000 of federal student loan debt per borrower, saying he feels more comfortable forgiving $ 10,000 per borrower.
“I’m not going to make that happen,” Biden said emphatically to a Wisconsin audience member who asked him about eliminating $ 50,000 per person of student loan debt, a proposal that has been promoted for months by the majority leader in the Senate, Chuck Schumer, Senator Elizabeth Warren (D-Mass.) And a number of other progressive legislators.
“I am prepared to cancel a debt of $ 10,000, but not 50,” said Biden to the audience member, answering the question directly for the first time as president. “Because I don’t think I have the authority to do that by signing the pen.”
White House officials said on Wednesday that Biden’s reference to canceling $ 10,000 in loan forgiveness was not to describe executive action, but to reflect his endorsement of achieving that goal through legislation, which he still did not propose.
Such a plan would likely face a difficult path in Congress, where even some moderate Democrats and almost all Republicans opposed the total forgiveness of student loans.
Some Democrats also said that billions of dollars spent on widespread loan forgiveness could be better spent elsewhere or should at least be targeted at students who need it most.
“Even the modest student loan forgiveness proposals are incredibly expensive and use federal spending that can promote other goals,” wrote Adam Looney, an Obama administration Treasury official and now a senior member of the Brookings Institution, last week. “The sums involved in the loan forgiveness proposals under discussion would exceed cumulative spending on many of the country’s major anti-poverty programs in recent decades.”
Biden’s comments on CNN’s city hall drew the ire of progressive and elected Democrats on Wednesday.
“It’s time to act,” said Schumer and Warren in a joint statement, reiterating that they believe the government “has ample authority to immediately provide the much needed relief to millions of Americans.”
Adam Green, co-founder of the Progressive Change Campaign Committee, said Biden’s $ 50,000 rejection and the possible ban on loan forgiveness through executive action “seemed unnecessary” and would undermine his position with activists who are pushing for quick action.
“It throws cold water on the enthusiasm of activists for no reason,” said Greene, calling it a “distraction” for other parts of his agenda, like Covid relief, where progressives were very satisfied with his approach.
Congressman Alexandria Ocasio-Cortez (DN.Y.) also rejected Biden’s response to student debt, saying in a tweet that the “lawsuit against student loan forgiveness is looking more unstable every day”.
“We have the * Senate majority leader * on board to forgive $ 50,000,” said Ocasio-Cortez, who is a potential primary threat to Schumer in his run for reelection next year. “Biden is holding back, but many of the arguments against it just don’t hold up to close inspection. We can and must do this. Keep pushing! “
Advocates of debt cancellation have increasingly framed the debate as a matter of racial justice, noting the disproportionate burden of student loan debt on borrowers of color.
Color of Change, a racial justice group, released a poll this week showing that two-thirds of black voters “strongly support” the cancellation of student loan debt. The poll found that 40% of black voters would not vote for a candidate who opposes student loan debt cancellation.
Arisha Hatch, the group’s vice president and head of campaigns, called Biden’s comments on student debt on Tuesday night “deeply disappointing.”
“He is definitely out of step with black voters who not only elected him, but also gave the majority to the Democrats,” she said. “It will take more pressure for him to fully understand the importance of this for black voters and many other progressive voters.”
Alexis Goldstein, senior policy analyst at Americans for Financial Reform, which organized hundreds of civil, labor and progressive rights groups lobbying for debt cancellation, said he was optimistic about the Biden administration’s review of the issue.
“We remain confident that this is something the president can do through executive action,” she said, adding that the $ 10,000 level should be a starting point, not a ceiling. “We will continue to pressure the president for a number that better reflects the crisis and better addresses issues of racial equality.”
Approximately 45 million Americans owe approximately $ 1.6 trillion in federal student loans. The cancellation of $ 10,000 of student loan debt would completely eliminate the debts of more than 15 million borrowers whose current balances are less than or equal to that amount, according to the most recent federal data available on September 30.
Another 23 million borrowers owe balances between $ 10,000 and $ 60,000; and more than 7 million debtors have a federal debt of $ 60,000 or more.
Among college students who borrow money to attend college, the average student graduates with an average of nearly $ 29,000, according to the latest analysis by the Institute for College Access & Success.
The next DOJ legal review announced by the White House comes amid a heated debate over whether the Department of Education itself has the power to cancel large portions of its outstanding student debt portfolio.
Proponents of student debt relief say the long-standing provisions of the Higher Education Act give the education secretary broad authority to cancel loans. Likewise, they argue, there is a separate 2003 law that provides the Department of Education with more discretion over student loans during declared emergencies.
But the Trump administration, in its final days of office, issued a legal opinion concluding that the department has no authority to settle large amounts of debt without Congressional approval. This memo, written by a Trump nominee, is not binding on the agency and can be reversed by the Biden government. A Department of Education spokesman on Wednesday declined to say whether the Trump administration’s memo remains in effect at the agency or whether it will be terminated.